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Market Overview

The stock market is set for a somber morning, with indications pointing towards a drop following yesterday’s decline. Tensions are rising as Apple (AAPL), a market heavyweight, is experiencing another 3.0% slide in pre-open movements. The tech giant’s recent struggles are largely due to news that China is considering an extensive ban on iPhones. As the world’s most valuable company, Apple’s performance invariably impacts the broader market sentiment.

Interest Rates & Bonds

After the significant surge we’ve seen recently, Treasury yields are experiencing a slight pullback. The 2-year note yield has receded by four basis points, now resting at 5.00%. Meanwhile, the 10-year note yield has fallen three basis points to 4.27%. Despite this momentary retreat, the overarching increase in yields remains a pressing concern for market stakeholders.

Commodity Insights

Oil prices are also showing signs of a minor retreat. With WTI crude oil futures dropping by 0.6%, the current rate stands at $87.01 per barrel. This dip, although modest, further underscores the caution permeating the market.

International Trade

In a surprising turn of events, China has reported a decline in its trade metrics. August saw an 8.8% year-over-year drop in exports and a 7.3% year-over-year dip in imports. However, it’s crucial to note that these figures were better than anticipated, hinting at a potential silver lining.

Economic Calendar for Today

– 8:30 ET: Keep an eye out for the Weekly Initial Claims, Continuing Claims, revised Q2 Productivity, and revised Q2 Unit Labor Costs.
– 10:30 ET: Weekly natural gas inventories will be released.
– 11:00 ET: Updates on weekly crude oil inventories are expected.

Corporate Headlines

1. Apple – Amid an ongoing tussle with China, Apple may face a broader iPhone ban, extending to state and federal agencies, as per Bloomberg. Additionally, premium iPhone prices are set to rise by $100 next week, according to the Wall Street Journal.
2. McDonald’s has received an upgrade to ‘Overweight’ from ‘Equal Weight’ by Wells Fargo.
3. Goldman Sachs is now under HSBC’s radar, receiving a ‘Buy’ rating.
4. C3.ai reported impressive earnings, beating expectations on revenue.
5. Roku faces a downgrade to ‘Hold’ from ‘Buy’ by Loop Capital.
6. American Eagle outpaces earnings estimates and raises its revenue forecast.
7. Yext aligns with EPS and revenue expectations, with promising projections for FY24.
8. Verint Systems disappoints with its earnings and revenue, alongside a conservative FY24 revenue forecast.
9. UiPath beats expectations but presents a mixed outlook for the future.
10.ChargePoint misses Q2 revenue expectations and provides a lower-than-expected Q3 forecast.
11. Dutch Bros announces a public offering of $300 million Class A common stock.
12. BlackBerry provides a conservative Q2 revenue outlook but remains optimistic for FY24.
13. Dave & Buster’s reports a slight miss on earnings and revenue.
14. WestRock and Smurfit Kappa are in talks regarding a potential merger.
15. Calavo Growers and G-III Apparel both impress with their earnings.

Global Currency & Policy

The dollar’s resilience remains a focal point this week, hitting a six-month high. This strength is attributed to a series of reports indicating robust US growth, contrasting with the weakening economies in Europe and China.

The euro is under pressure due to declining German industrial output. Meanwhile, the Chinese yuan has fallen to its lowest in 16 years. Peter Kinsella, a leading global currency strategist, suggests that the dollar’s strength is a result of slowing growth outside the US, combined with an aggressive stance from the Federal Reserve.

The Bloomberg Dollar Spot Index is on track for an eighth consecutive week of gains, the longest streak since 2005. The current economic indicators, suggesting a soft landing for the US economy, may lead the Federal Reserve to maintain higher borrowing costs, enhancing the dollar’s allure.

Looking Ahead

Market participants are keenly awaiting the US weekly jobless claims and insights from several Federal Reserve officials. These updates will provide essential clues about the potential policy direction. European stocks are currently on a downward trend, particularly in the tech sector. Asian markets also closed in the negative territory, with Chinese stocks facing pressure from the property sector.

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In conclusion, the market today is filled with caution, primarily due to Apple’s ongoing challenges with China and the broader implications of these tensions. It’s essential for investors to stay informed and make well-considered decisions in these volatile times.