Morning Reads
- Oil Prices Near $100 per Barrel Raise Questions Over Demand Destruction
- Evergrande Tycoon Crossed a Red Line When Wealth Funds Ran Dry
- Japan’s 30-Year Bond Yield Reaches Highest Level Since 2013
- Eurozone Inflation Rate Drops to 4.3 Percent
- Europe Is Trying to ‘Trump Proof’ the Transatlantic Relationship
- Turmoil Over Migrants at U.S.-Mexico Border Is Straining Trade Flows
- The Threat of an American Debt Crisis
- BlackRock CEO Larry Fink Sees 10-Year Yields Heading Above 5%
- Quirk of Bond Futures Threatens to Accelerate Surge in US Yields
- A Silver Lining From the Pandemic: A Surge in Start-Ups
- Huawei Takes Revenge as China Catches Up on Semiconductors
- Biden’s $100 Billion Chip Bet Caught Up in Arizona Union Showdown
- UAW Expected to Expand Auto Strikes Friday
- EVs Will Hit Detroit Harder Than a UAW Raise
- Billionaire Agarwal Shakes Up Vedanta Empire as Debt Bill Looms
- VW Scraps Plan for New €2 Billion EV Factory in Germany
- How West Africa Can Reap More Profit From the Global Chocolate Market
- Meal-Kit Maker Blue Apron to Be Sold (Ending Disastrous Six-Year Experiment with Public Ownership)
- Nike Clears a Low Bar With Investors
- Henry Kravis, Endeavor, Fenway Eye PGA Tour Deal to Rival Saudi Arabia’s
- The U.S. Tried to Pitch Peanuts at Japanese Baseball Games. It’s a Tough Nut to Crack
- Evergrande Halts Trading After Founder Put Under Police Control
- Saudi Arabia and Russia Win Big in Gamble on Oil Cuts
- Oil Touches $95 With Shrinking Inventories Fanning Fresh Rally
- Feeding the World Once Brought the US Untold Influence—No More
- Want to Spur Green Energy in Wyoming? Aim for the Billionaires
- Missing ‘Gold Standard’ Economic Data Will Test Alternatives in US Shutdown
- Bond Selloff Pushes Treasury Yield to New ‘07 Peak
- What’s Driving the September Stock Swoon
- GameStop’s Billionaire Backer Cohen Replaces Ousted CEO
- Elon Musk Wins US Space Force Contract for Starshield
- Meet the A.I. Jane Austen: Meta Weaves A.I. Throughout Its Apps
- To Bring Socializing Back to Social Networks, Apps Try A.I. Imagery
- Google User Data Has Become a Favorite Police Shortcut
- Car Sales Are Slowing. Car-Listing Websites Are Just Getting Started
- Peloton Soars After Deal With Lululemon to Share Fitness Content
- Logistics Companies Grow Cautious on Holiday Hiring
- When Corporate Confessions Make Companies Look Good—and When They Don’t
Todays Open Interest Change
PREMIUM
Prepper
The path towards avoiding a federal government shutdown is getting slimmer with a pending deadline of 12:01 AM ET on Sunday. Millions of federal employees and military service members will be furloughed in the event that additional funding cannot be approved, the SEC will operate with minimal market oversight, and economic data releases will be delayed at a sensitive time for the U.S. economy. Americans who also rely on federal assistance could face service disruptions, there will be delays on small business loans and clinical trials for medical treatments, exporters won't be able to get licenses, while a prolonged shutdown could impact air travel or other industries that rely heavily on federal workers.
Where things stand: The Senate currently has bipartisan support for a stopgap measure that would extend funding until Nov. 17, but hardline Republicans in the House have rejected it. The group wants deeper spending cuts and to tie the bill to immigration and border enforcement. The holdouts are triggering a dilemma for House Speaker Kevin McCarthy, and some have even vowed to oust him if they don't meet their demands. Overnight, the Republican-led House passed a series of partisan bills, including a defense bill that removed funding for Ukraine, but that has little chance of getting through the Democrat-led Senate.
Credit ratings agencies are also taking notice, with Moody's warning that a shutdown would be credit negative for the U.S. Fitch downgraded America's credit rating following the debt ceiling drama back in the summer, while S&P was the first to downgrade U.S. government debt in 2011. While budget deadlocks are not unusual in Congress, with shutdowns occurring 21 times over the past five decades, the latest one would "demonstrate the significant constraints that intensifying political polarization puts on fiscal policymaking at a time of declining fiscal strength, driven by widening fiscal deficits and deteriorating debt affordability."
SA commentary: "Despite potential economic consequences, the S&P 500 and sectors dependent on government funding have historically been unaffected during the duration of the shutdowns," writes Investing Group Leader Manika Premsingh, author of Green Growth Giants. "The impact of a shutdown depends on its nature and duration, with longer shutdowns having had a notable economic impact in the recent past."
Just do it.
Nike (NKE) jumped 7.9% after the close on Thursday as quarterly profits beat expectations. While margins continued to decline, hurt by higher product costs and unfavorable foreign exchange rates, strategic pricing actions offset the impact, and margins are expected to improve further in Q2. China sales missed estimates due to forex headwinds, which are expected to continue for the next couple of quarters. Even so, CEO John Donahoe touted Nike's market share gains in China. "We feel good about the opportunities in China in the coming quarters and into the medium to long term," he said. See Nike's results in charts here. (23 comments)
Treasury trouble
U.S. Treasury returns are on track for the worst month this year, as the bond market selloff continued after the Fed signaled that interest rates would remain higher for longer. The recent selloff has pushed the 30-year yield (US30Y) and the 10-year yield (US10Y) to their highest levels in over a decade. Traders are also closely eyeing the release of the Core Personal Consumption Expenditures Price Index - the Fed's preferred inflation gauge - this morning, with a tame reading likely to assuage some market concerns. Meanwhile, billionaire investor Bill Ackman's bet against 30-year Treasurys has paid off, and he expects long-term Treasury yields to rise even further amid stubbornly high inflation. (2 comments)
$125.98
Amazon (AMZN) traded flat to end at $125.98 a share on Thursday, notching the same closing price for the third straight session. The trading oddity comes as Amazon has been in the spotlight for a variety of reasons. The FTC this week filed its highly-anticipated lawsuit against the e-commerce giant, and while SA analyst Tradevestor expects the FTC ride to be bumpy, they remain a buyer of the stock. The success of Amazon's Prime Day event is also at risk, with retail giants Walmart (WMT) and Target (TGT) setting early holiday sales promotions. Furthermore, Amazon is just four weeks away from reporting Q3 earnings and giving its guidance for the crucial holiday quarter. Will Amazon manage to close at $125.98 yet again today? (31 comments)
Today's Markets
In Asia, Japan -0.1%. Hong Kong +2.5%. China +0.1%. India +0.5%.
In Europe, at midday, London +0.8%. Paris +1%. Frankfurt +1%.
Futures at 7:00, Dow +0.5%. S&P +0.5%. Nasdaq +0.7%. Crude +0.9% to $92.55. Gold +0.6% at $1,889.70. Bitcoin +1.9% to $27,029.
Ten-year Treasury Yield -5 bps to 4.55%.
Today's Economic Calendar
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
8:30 Personal Income and Outlays
9:45 Chicago PMI
10:00 Consumer Sentiment
12:45 PM Fed’s Williams' Speech
1:00 PM Baker Hughes Rig Count
3:00 PM Farm Prices
Companies reporting earnings today »
What else is happening...
Nvidia offices in France raided over suspected anti-competition practices.
China's trade council requests U.S. to reconsider tech investment ban.
Microsoft considered Apple investment to gain Bing share, exec says.
NextEra Partners (NEP) continues plunge after slashing outlook.
CarMax (KMX) slides after flagging vehicle affordability headwinds.
OpenAI's ChatGPT can now search the internet in real-time.
Hawaiian Electric (HE) defends actions taken prior to Maui fire.
Schumer may tie in criminal justice to marijuana banking bill.
BlackBerry (BB) in charts: Cybersecurity revenue tumbles.
Cleveland-Cliffs (CLF) signs NDA in U.S. Steel (X) bid.
Is GameStop's (GME) demise assured with new CEO?