Reads
- Millions of Young People Are Unemployed and Disillusioned
- The Skyrocketing Toll of the Billion-Dollar Climate Disaster
- Biden’s ‘Made in America’ Pledge Collides With His Climate Goals
- An American Energy Giant Sees Israel as a Springboard to Europe
- Shell and TotalEnergies Profits Cut in Half by Lower Oil Prices
- Federal Reserve Raises Interest Rates to 22-Year High
- GDP Data Set to Reinforce Fed View the US Will Avoid Recession
- The Economy Has Defied Expectations. Here’s What to Focus On in the GDP Data
- Stock Pickers Are Missing Out on Tech Boom Thanks to 80-Year-Old Rules
- A Brexit Champion’s Feud With His Elite Bank Brings a C.E.O. Down
- A Beach Club Dinner and Jamie Dimon’s Touch: How PacWest Was Rescued
- European Commercial Property Deals Drop 58% to Lowest Since 2010
- Hamptons Luxury Bidding Wars Hit Record High Even as Prices Sag
- Florida’s Flood of New Wealth Boosts High-Speed Train Bonds
- Warren and Graham Team Up to Take on Big Tech
- Microsoft Faces European Antitrust Investigation Over Bundling of Teams Software
- Netflix Reworks Microsoft Pact, Lowers Ad Prices in Bid for Growth
- Researchers Poke Holes in Safety Controls of ChatGPT and Other Chatbots
- AI in Hollywood Has Gone From Contract Sticking Point to Existential Crisis
- Tesla Owners Have Soured on Elon Musk, But Still Love Their Model 3s
- McDonald’s Sales, Profit Beat Estimates as Diners Flock to Chain
- More Income for the Supreme Court: Million-Dollar Book Deals
- Shaped the Federal Reserve
- Powell Has Stopped Handing Gifts to Wall Street on Fed Day
- Private Equity Finally Gets a Piece of the Banking Crisis
- Deutsche Bank’s Rising Costs Take Shine Off Debt Trading Beat
- Elon Musk the Banker Wants to Take On Dimon Where Google Failed
- Banc of California Agrees to Buy PacWest as Regional Lenders Seek Strength Together
- Indiana and Midwest Take Top Slots in WSJ/Realtor.com Housing Index
- Thirsty Data Centers Are Making Hot Summers Even Scarier
- San Francisco’s Office Demand Surges, Largely Thanks to AI Companies
- Microsoft, Alphabet Earnings Lay Bare the AI Hype. Why Patience Is Needed
- The Luxury Home Market Confronts Its New Reality: Not Enough Buyers and Sellers
- UPS Blinked, Teamsters Leader Says, Clearing Way for Labor Deal
- AT&T Tops Profit, Cash Flow Estimate as Customer Growth Dips
- Samsung to Launch New Galaxy Z Fold, Flip Phones Amid Slow Adoption So Far
- Elon Musk’s Rebranded Twitter Cuts Ad Prices
- How Jack Ma’s Ant Group Is Inching Toward IPO Reboot
- Boeing’s Quarterly Results Top Expectations as Airplane Deliveries Pick Up Pace
- Coca-Cola Earnings, Sales Beat Street Forecasts As Drinks Maker Follows PepsiCo With Price Hikes
- Joe Lewis, Billionaire Owner of Tottenham Hotspur, Charged with Insider Trading
Todays Open Interest Change
PREMIUM
Prepper
The Federal Reserve pushed interest rates to a 22-year high on Wednesday, with another 25 bps move that'll bring its key rate to 5.25%-5.50%. It's not enough for the central bank to declare victory on historic inflation just yet, but it sure looks like markets are charting their next steps, with the CPI now down to 3% (from a high of over 9% seen last summer). Not much changed in the new FOMC statement, and while Fed Chair Jay Powell did continue to voice caution in the accompanying press conference, he did shift his tone especially with regards to the outlook for the U.S. economy.
Turning the corner: "The staff [economists from the central bank] now has a noticeable slowdown in growth starting later this year in the forecast, but given the resilience of the economy recently, they are no longer forecasting a recession... My base case is that we will be able to achieve inflation moving back to our target without the kind of really significant downturn that results in high levels of job losses that we've seen in some past, many past instances... The Federal Funds Rate is at a restrictive level now, so if we see inflation coming down, credibly, sustainably, then we don't need to be at a restrictive level anymore... You'd stop raising [rates] long before you got to 2% inflation and you'd start cutting before you got to 2% inflation, too."
Following the news, the Dow Jones Industrial Average (DJI) notched its 13th consecutive advance, marking its biggest winning streak since the 1980s, and if it closes higher today, it would be its longest positive run since 1897. The latest U.S. GDP number for the second quarter will also be published this morning at 8:30 AM ET. Expectations are for growth to have slowed to a 1.5% annualized rate vs. growth of 2.0% in Q1, though that's a far cry from many economic forecasts that initially predicted a deep recession to already have taken hold by the middle of 2023.
SA commentary: "The Fed appears to be on track for a soft landing," wrote analyst Komal Sarwar in a new article covering the Invesco NASDAQ 100 ETF (QQQM). "The current bull market is supported by strong economic fundamentals, corporate outlook, and investor sentiment, with sectors such as technology, consumer cyclical, and communications showing particularly strong results." The S&P 500 (SP500) has "gained about 4% since earnings season began almost two weeks ago, with 75% of companies outperforming expectations, according to FactSet data." (8 comments)
Meta Platforms (META) jumped 8% AH on Wednesday after posting Q2 earnings that easily beat expectations. The report echoed an online advertising recovery signaled by rival Alphabet (GOOG, GOOGL) and Meta guided for Q3 revenue above estimates. As with other tech companies, Meta's earnings call focused largely on AI, and while CEO Mark Zuckerberg previously said 2023 would be a "year of efficiency," overall expenses in Q2 grew 10%. Investing Group Leader Livy Investment Research said the results continue to show the company's progress in turning a corner, though Growth at a Good Price believes Meta may not rapidly catch up with its steep valuation. (52 comments)
With Urals crude (URDB:COM) trading at or above $60 for more than two weeks, the U.S. government will likely reach out to Western allies to remind them to adhere to the price cap on Russian oil exports by ship. Enforcement will likely take place quietly out of fear that harsh public measures could upend energy markets. Compounding worries in the West, Moscow is increasingly relying on smaller trading firms to export crude to Asia, and while this does not violate sanctions, it could hinder tracking Russian oil transactions. Elsewhere, NATO will boost surveillance in the Black Sea region, including with maritime patrol aircraft, amid escalating tensions after Russia pulled out of a key grain deal. (1 comment)
Yellow Corporation (YELL) dropped 26% to $0.76/share before the bell as the beleaguered trucker could file for bankruptcy protection this week. It follows a cash crunch that forced Yellow to miss union payments and a hemorrhaging of customers as a union dispute forced it to limit pick-ups. The exodus could drive up pricing in the trucking sector, which is already facing low freight rates and weak demand. Yellow's customers include large retailers such as Home Depot (HD) and Walmart (WMT) and others that have paused cargo shipments out of fear that goods could be lost if the company goes bankrupt. (1 comment)
Today's Markets
In Asia, Japan +0.8%. Hong Kong +1.5%. China -0.2%. India -0.7%.
In Europe, at midday, London +0.2%. Paris +1.4%. Frankfurt +0.9%.
Futures at 7:00, Dow +0.1%. S&P +0.6%. Nasdaq +1.2%. Crude +0.8% to $79.43. Gold +0.3% to $1,976.10. Bitcoin +1% to $29,482.
Ten-year Treasury Yield +2 bps to 3.87%.
Today's Economic Calendar
8:30 Durable Goods
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 GDP Q2
8:30 Initial Jobless Claims
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $35B, 7-Year Note Auction
4:30 PM Fed Balance Sheet
Companies reporting earnings today »
What else is happening...
Amazon (AMZN) could face antitrust lawsuit from FTC next week.
Justice Dept, EPA investigate telecom firms over lead cables.
Boeing (BA) hits 52-week high after reporting narrower loss.
XPeng (XPEV) soars as Volkswagen (OTCPK:VLKAF) buys in.
Coca-Cola (KO) rallies amid strong Q2 show, guidance hike.
Union Pacific (UNP) jumps 10% after naming new CEO.
Chipotle (CMG) slides on rare comparable sales miss.
Insider watch: Salesforce (CRM) top executives sell stock.
Mastercard (MA) to end marijuana purchases on debit cards.
Amazon (AMZN): 'Thousands' of AWS clients trying out new AI tools.