Yesterday, the Dow Jones and the S&P fell by 0.08% and 0.07%, respectively. The Nasdaq 100, which jumped 2.85% the previous day and promised a bullish trajectory after Wednesday’s nice surprise on inflation, finally fell 0.65%.
It’s all a bit confusing. In the United States and the rest of the financial world, investors were reassured to see that the increase in consumer prices began to moderate in July, but they remained cautious after a sharp drop in producer prices in both period. The news confirms that inflation is cooling, but investors also seem to see it as a sign that the economy is slowing.
Stock futures are in the green today, as lower inflation means the Fed may not raise rates by 0.75% in September as previously expected, but by 0.50%. According to the CME FedWatch tool, 59.5% of investors expect a 0.5% increase in September.
However, San Francisco Fed President Mary Daly told Bloomberg Television that the latest inflation figures “are important in that they say we’re seeing some improvement but they’re not a breakthrough.”
He said that at this point, he supports a 50 basis point when the Fed next meets in September, but is keeping an “open mind” if additional data calls for a bigger hike.
The University of Michigan index measuring US consumer confidence in August, published at 10am today, will provide further clues about how consumers are affected by prices and what effect this has on demand. .
The Bloomberg consensus points to an increase to 52.5 points for August, compared to 51.5 in July.
Economic highlights of the day:
European industrial production for June and the University of Michigan consumer confidence index will close out the week of macroeconomic indicators. All the macro agendas are here.
The euro continued to climb, clinging to USD 1.03. The ounce of gold remains in its recent zone at 1791 USD. Oil rallies, with North Sea Brent crude at USD 99.09 per barrel and US light crude WTI at USD 93.87. The yield on 10-year US debt rises to 2.85%. Bitcoin is hovering around USD 24,000.
Johnson & Johnson announced Thursday that it will stop selling its talcum powder as early as 2023 worldwide, more than two years after it stopped selling it in the US and Canada following thousands of accusations that the product caused cancer in its users.
* Pfizer rose 0.4% in premarket trading after losing 3.3% the previous day in response to growing concerns about Zantac-related lawsuits in the US
* Twitter – Ark Invest, the investment fund manager led by Cathie Wood, has announced that it has sold almost all of its remaining holdings in the social network.
* Rivian- The electric car maker gained 1.6% in pre-market trading as the release of better-than-expected quarterly sales exceeded a forecast for a larger-than-expected annual operating loss.
* Several Chinese state-owned groups, including insurer China life insurance and oil company Sinopec, have announced plans to end their listings on the New York Stock Exchange..
* Illumina – The genetic sequencing company’s stock fell nearly 15% in premarket trading after quarterly results were deemed disappointing, leading at least four analysts to lower their price targets.
* Toast – The restaurant industry software company’s share price jumped 15.9% in pre-market trading after it reported higher-than-expected quarterly sales and raised its annual forecast.
- Applied Industrial Technologies: Baird downgraded to neutral from outperform. PT rose 8.5% to $129.
- Archer-Daniels-Midland: Wolfe Research placed an outperform recommendation. PT rose 39% to $117.
- Bunge: Wolfe Research initiated coverage with an outperform recommendation. PT rose 29% to $127.
- Cigna: Raymond James adjusts price target to $330 from $300. Strong buy rating reiterated.
- CrowdStrike: Guggenheim initiates buy with $270 price target.
- Equinix: Argus adjusts price target to $780 from $700. Maintains buy rating.
- Huntsman: RBC Capital Markets maintains an outperform rating. PT increased by 48%.
- International Flavors & Fragrances: Citigroup returned to neutral with a $126 price target.
- O’Reilly Automotive: Guggenheim Securities maintains a buy rating. PT to $823 from $730.
- Salesforce: Guggenheim begins selling with $150 price target.
- ServiceNow: Guggenheim starts neutral with $510 price target.
- Snowflake: Guggenheim begins selling with $125 price target.
- Splunk: Guggenheim initiates buy with $160 price target.
- Teladoc: DA Davidson initiates buy with $45 price target.
- Walt Disney: Rosenblatt Securities raised target to $140 from $124. Maintains buy rating.
- Wendy’s: Piper Sandler maintains an overweight rating. PT to $24 from $20.
- Ziff Davis: Susquehanna Financial cut target to $120 from $140. Maintains positive rating.
- Zentalis Pharmaceuticals: Morgan Stanley lowered price target to $60 from $95. Maintains overweight rating.