Market Overview
- Equity Futures: A decline is observed after a favorable finish yesterday. Contributing heavily to this decline is Oracle’s substantial drop after an unfavorable future guidance.
- Oil Prices: WTI crude oil futures rose by 0.9% and are now at $88.09/bbl. These increasing rates may exert pressure on the broader market.
- Bond Yields: Both the 2-yr and 10-yr note yields remained constant at 4.99% and 4.28% respectively.
Economic Indicators
- NFIB Small Business Optimism: August data shows a dip from 91.9 to 91.3, signaling cautious sentiment among small businesses.
- Upcoming Data Release: Market participants are eyeing the August Consumer Price Index, set to release tomorrow. This will provide a clearer picture of inflation and its current trajectory.
Corporate News
- Oracle (ORCL): Despite beating estimates by $0.04, Oracle has had a drop of 10.2%. This is primarily due to their Q2 EPS guidance and revenue falling below the consensus.
- Apple (AAPL): Apple is gearing up for their annual hardware refresh, expected to unveil the latest iPhone iteration today at 1:00 p.m.
- WestRock (WRK) and Smurfit Kappa (SMFKY): These two companies are set to merge, aiming to be a worldwide leader in sustainable packaging.
- CVS: Received an upgrade from Wolfe Research, improving its status from Peer Perform to Outperform.
- Casey’s General (CASY): Positive news for CASY as it beats expectations by $1.16 and reports revenues in line with forecasts. This comes alongside an affirmation of FY24 financial targets.
- Enphase Energy (ENPH): Facing a downgrade from Truist to a ‘Hold’ from its previous ‘Buy’ status.
Tech Spotlight
- Oracle’s Decline: After revealing slowing cloud sales, tech stocks face some skepticism. Oracle’s decline, in particular, has raised questions about AI demand translating to business revenue.
- Nasdaq 100 Index Futures: A 0.3% dip indicates a slight pullback from yesterday’s 1.2% rally.
- Apple & SoftBank: Both these tech giants are set to capture attention, with Apple’s product announcement and SoftBank’s Arm Ltd. prepping for a significant IPO.
European Market Concerns
- Currency depreciation is noticed in both the euro and the pound against the dollar. This can be attributed to the looming threat of stagflation in Europe.
- The UK’s consistent wage growth, combined with Germany’s stagnating economy, places added pressure on central banks. Key decisions from the European Central Bank are awaited this Thursday.
US Inflation Watch
- The upcoming consumer-price index report will be pivotal in understanding the Federal Reserve’s future moves. Any inflation number above the expected 0.6% might prompt the bond market to anticipate a further rate hike, possibly even before 2023 concludes.
Asia-Pacific Update
- Asian stocks show mixed sentiments with Chinese shares facing a decline. Although Country Garden Holdings Co. showed positive momentum, it wasn’t sufficient to maintain a broader bullish outlook.
- Currency Watch: Yen faces a dip while the yuan remains stable. Noteworthy is the Japanese government’s bond auction which saw an unexpected cut-off price, especially after remarks on the negative interest rate policy.
Commodities Corner
- Oil: Continues its upward trend, approaching its highest value for the year.
- Gold: Remains stable, with no significant fluctuations observed