Reads
- Inflation Is Cooling. Food Inflation Could Get Worse
- Hiring Has Stayed Strong. Here’s Where to Look for Signs of Cooling
- Slowing US Wage Growth to Set Stage for End of Fed Tightening
- Congress Ended a Tax Break. How That May Help Higher Earners
- BofA Clients Turn Cautious, Flee From Stocks on Recession Risks
- Credit Suisse Collapsed, And Switzerland Went Back to Making Money
- ‘Going Concern,’ Going Bust
- ‘You Have to Work Extra to Hire People’: What Companies Have Been Saying About Jobs
- The Chip Titan Whose Life’s Work Is at the Center of a Tech Cold War
- Superconductor Breakthrough Claims Traced to Seoul Basement Lab
- Apple Set to Relinquish Historic $3 Trillion Value
- Amazon Shines During Apple’s Off-Season
- Disney’s ESPN Plots Its Streaming Future, Seeking Tie-Ups With Leagues and Rivals
- The Women Behind Cadillac’s $300,000 EV Aimed at Rolls-Royce
- The Brand Stories of Our Lives
- Revolut to Stop Crypto Services for U.S. Customers
- Teen Gamers Swiped $24 Million in Crypto, Then Turned on Each Other
- ‘Bitcoin Bonnie and Clyde’ Plead Guilty to Money Laundering
- A Look Inside Sam Bankman-Fried’s Empire Before It Collapsed
- Israeli AI Startup Vesttoo Sparks a Global Insurance Scandal
- Policy Will Remain Tight
- BOJ Makes Bold Shift as Yen Risks Grow Too Big to Ignore
- A Sudden Jump in Volatility Spells Trouble for Stocks
- Markets Still Weigh the Meaning of a U.S. Credit Rating Cut
- Is Good News Finally Good News Again?
- Bill Ackman Says He’s Short 30-Year Treasuries as Supply Ramps Up
- Larry Fink’s Bet on Saudi Oil Money Is Also His Latest E.S.G. Woe
- Apollo Posts Record $1 Billion Profit as Rate Hikes Fuel Athene
- Winners and Losers Likely as Switzerland Absorbs Credit Suisse Layoffs
- How an Ex-Goldman Banker Fought US Sanctions Over Russia — and Won
- U.S. Steelmakers Are Still Expanding as Demand Slows
- California Law Threatens to Help Drive Up Bacon Prices
- Workers to Employers: We’re Just Not That Into You
- Shrinking Minority of Americans Able to Cover $400 Surprise Bill
- Apple and Amazon Results Pose Tech Rally’s Toughest Hurdle Yet
- Meta’s Ray-Ban Smart Glasses Fail to Catch On
- Yellow’s Downfall Throws $700 Million US Covid Loan in Jeopardy
- Fall in Bud Light Sales Puts Dent in Beer Maker’s Earnings
- How Primark Built a Thriving Fashion Business Without Selling Online
- Hollywood Studios Signal New Strategy by Talking With Writers
- Murder, Money and the Battle for a Pharmaceutical Empire
Todays Open Interest Change
PREMIUM
Prepper
There's an interesting story playing out in the bond market, and while the narrative may be hard to identify, it's easy to spot some themes with yields hitting fresh 2023 highs. Things began escalating a week ago following the Bank of Japan's policy tweak, but since then, Fitch downgraded America's debt and the Treasury increased the size of longer-term debt sales to address mounting borrowing needs. It comes as hedge funds have been shorting Treasuries en masse, prompting Bill Ackman to bet against the 30-year bond, though others like Warren Buffett have since said this is "one thing" that investors do not need to "worry about."
Snapshot: The resilience of the labor market is another area that's being eyed by bond watchers, with the possibility that the data-dependent Fed will need to continue raising its policy rate as it responds to strong readings. Wednesday's private sector ADP jobs report was another blowout, and while that doesn't necessarily convey what the government's monthly figure will show, investors are paying extra attention to today's nonfarm payrolls release at 8:30 AM ET.
Economists expect 200K new jobs were added in July, down modestly from the 209K reported in June, while the unemployment rate is seen staying at 3.6%. Also watch for the Labor Department's revisions to June and May numbers, as well as average hourly earnings growth, which is forecast to cool to 4.2% Y/Y compared with 4.4% in June. If there is any slowdown on that front, it can suggest that the central bank's rate hikes are having their intended effect on the economy, while helping the Fed take its foot off the accelerator in its fight against inflation.
SA commentary: "Cognitive bias is a pernicious aspect of human thought that can make even the best among us unknowing victims," writes analyst Christopher Robb in July Jobs Report Likely Bolsters Soft Landing Narrative. "Wall Street is a 'tribe' in some ways, like any other industry or group. It has an orthodoxy on monetary policy and inflation that has blinded many in finance and resulted in spurious conclusions. Properly navigating economic cycles is difficult in the first place - even more so when you throw in simultaneous demand and supply shocks of an intensity never experienced. Accepting that many correlations that have traditionally provided insight may no longer be functional is essential to navigating today's markets."
Sales slowdown
Apple (AAPL) shares slipped 2.1% in after-hours trading on Thursday as the tech giant saw its sales decline for the third consecutive quarter. Pressures are expected to continue into Q4, with CFO Luca Maestri forecasting a double-digit decline in iPad and Mac sales due to tough comparisons with the prior year. On the positive side, iPhone sales are expected to improve sequentially, while Services revenue reached an all-time high of $21.2B driven by more than a billion subscriptions to offerings like iCloud, Apple Music, News, TV+ and more. Reports also suggest that Apple may be gearing up to unveil its new iPhone on September 13. (161 comments)
Watch the cloud
Helped by cost optimization efforts and the fastest delivery speeds it has ever recorded, Amazon (AMZN) rose 8.7% AH as its Q2 revenue handily beat estimates. The e-commerce giant also set ambitious Q3 targets and related that every one of its businesses has multiple ongoing generative AI initiatives. CFO Brian Olsavsky further confirmed on an earnings call that AWS - which saw slowing sales as customers cut back on spending - is now stabilizing and cost optimizations are moderating, with Q2 trends continuing into July. Following the report, SA analyst Tradevestor said Amazon's ecosystem is enough reason to remain bullish long-term, while Bill Maurer warned against buying the stock, given potential headwinds expected later this year. (60 comments)
Cuts could deepen
Crude is headed for its sixth weekly gain after Saudi Arabia extended its unilateral 1M bbl/day oil production cut by another month, and said it could be prolonged or even deepened. The move adds to other voluntary reductions by some OPEC members, while Russia will continue to reduce its crude supply into September. An OPEC+ panel is also scheduled to meet today amid growing concerns about oil supplies, but no policy changes are expected. With crude prices expected to rise further, Investing Group Leader Avi Gilburt is expecting a "sizable rally" over the coming years, but is not convinced that all charts have bottomed. (20 comments)
Today's Markets
In Asia, Japan flat. Hong Kong +0.8%. China +0.2%. India +0.7%.
In Europe, at midday, London -0.3%. Paris +0.2%. Frankfurt -0.3%.
Futures at 7:00, Dow +0.1%. S&P +0.2%. Nasdaq +0.3%. Crude +0.5% to $81.94. Gold -0.1% to $1,966.80. Bitcoin flat at $29,129.
Ten-year Treasury Yield flat at 4.19%.
Today's Economic Calendar
8:30 Non-farm payrolls
1:00 PM Baker Hughes Rig Count
Companies reporting earnings today »
What else is happening...
Bank of England raises interest rates again, Brazil first to cut.
Moderna (MRNA) ups COVID jab sales outlook despite Q2 drop.
KKR (KKR) in talks to buy Paramount's Simon & Schuster for $1.65B.
Warner Bros. Discovery's (WBD) earnings miss, but cash flow impresses.
Tupperware (TUP) surges 51% before the bell on debt restructuring deal.
AstraZeneca (AZN), Sanofi (SNY) RSV drug endorsed by CDC panel.
Upbeat guidance as Airbnb (ABNB) results and bookings top estimates.
Block (SQ) boosts outlook; Q2 gross payment volume disappoints.
CoreWeave raises $2.3B in debt backed by Nvidia's (NVDA) AI chips.
ConocoPhillips (COP) slips after miss, raises production outlook.
AB InBev (BUD) rallies after recording 7% revenue growth in Q2.