Morning Reads
- Prices at the Pump Fall, a Win for Efforts to Fight Inflation
- Is the Oil Price Slide a Red Flag or a Small Mercy?
- Trader Hartree Sees Policy Reforms Lifting Asia’s Carbon Markets
- Yen Strengthens After BOJ Board Member Signals More Rate Hikes to Come
- A Recession Signal Is Flashing Red. Or Is It?
- US CPI to Show Another Muted Rise as Fed Debates Rate-Cut Size
- Details of New US Bank Capital Rules Still Uncertain with Election Looming
- UniCredit Makes Move on Commerzbank as Germany Starts Exit
- HSBC Signals Maltese Exit Days After New CEO Takes Charge
- Murdoch’s $7.3 Billion Takeover Bid Rebuffed by Rightmove
- US Crypto Stocks Fall on Rising Bets on Harris’ Win After Presidential Debate
- The Big Takeaways for Business from Debate Night
- Taylor Swift’s Harris Endorsement Turns Tables on AI Abusers
- Shortfall in Young Engineers Threatens Nuclear Renaissance
- Europe Confronts Its Tech Dilemma: Regulate or Innovate
- China Wants to Replace Jeff Bezos as Musk’s Greatest Space Threat
- How Memphis Became a Battleground over Elon Musk’s xAI Supercomputer
- When Self-Driving Cars Don’t Actually Drive Themselves
- McDonald’s Rolls Out Kiosks That Take Cash, Pushing Diners Away From Cashiers
- Campbell Drops Soup From Its Name, Not Its Plans
- Topgolf Sent Callaway Into the Rough
- LVMH Close to F1 Sponsorship Deal for Range of Luxury Brands
- Lululemon Is Seeing a Slowdown in Its Women’s Business. Has It Reached Its Ceiling?
- Kevin Plank Broke Under Armour. Can He Fix It?
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Whats Moving
PREMIUM
Prepper
All eyes are on the U.S. Consumer Price Index for August, which is set to be published at 8:30 AM ET. While the Fed usually turns to the PCE Price Index as its favorite gauge to monitor price pressures, today's report is the last inflation reading before the FOMC rate decision next week. Investors are primed for another soft reading, helped by a decline in gasoline prices during the month and a labor market that has been cooling.
Snapshot: The headline CPI figure is expected to come in at 2.5%, which would mark the first time inflation fell firmly below the 3% mark in over three years. It would also mean that inflation is as close to 2% as to 3%. The Fed has set a 2% target as the goal for winning its inflation battle and a big move in that direction would have broad impacts on monetary policy and a coming easing cycle.
"There are two broad categories that are still above 5% annual inflation: Shelter at 5.1% and Transportation at 8.8% (insurance and maintenance/repair)," wrote SA analyst Damir Tokic. "The return to price stability requires the stabilization in the shelter inflation, given its weight in the CPI. In fact, the key argument for an expected return to price stability is the expected fall in rents."
Outlook: Fed policymakers have made it clear that it’s time to cut rates. However, the biggest debate on Wall Street is by how much, with the current target range at 5.25%-5.50%. Many feel that the Federal Open Market Committee will trim borrowing costs by the standard 25-basis-point increment, but others see the potential of slashing them by a jumbo 50 bps before any serious economic fallout ensues.
Which party gets better stock market returns?
Debate recap
Vice President Kamala Harris and former President Donald Trump faced off at the second presidential debate on Tuesday, where both candidates sparred over the state of the economy, inflation and foreign policy. Both Harris and Trump touted their respective track records in office, and even clarified their stand on the energy sector. Betting markets tipped slightly in favor of Harris winning the election after the debate, but the contest remains extremely tight. ING predicts that a Trump win would result in the selling of Treasuries. (189 comments)
Basel III
In a win for Wall Street banks, the largest lenders will only face a 9% hike in capital requirements under a revised Basel III endgame proposal unveiled on Tuesday, which was well below the 19% increase floated in the original plan. Fed Vice Chair for Supervision Michael Barr said the updated deal would bring the benefits and costs of the hike "into better balance." Shares of too-big-to-fail banks still fell, led by JPMorgan (JPM), after its president Daniel Pinto warned that earnings expectations were too high. Ally Financial (ALLY) also plunged 18% after flagging worsening credit conditions among borrowers. (44 comments)
Long range
Russia has received a transfer of Fath-360 ballistic missiles, according to the U.S., prompting the West to impose fresh sanctions against Iran. "We've warned Tehran publicly, we've warned Tehran privately that taking this step would constitute a dramatic escalation," Secretary of State Antony Blinken declared. "Russia has now received shipments of these ballistic missiles and will likely use them within weeks in Ukraine." Blinken also said Moscow is sharing nuclear and space-related technology with Tehran, but the latter called the claims "completely baseless." (1 comment)
Today's Markets
In Asia, Japan -1.5%. Hong Kong -0.7%. China -0.8%. India -0.5%.
In Europe, at midday, London +0.1%. Paris +0.3%. Frankfurt +0.3%.
Futures at 7:00, Dow -0.4%. S&P -0.2%. Nasdaq -0.3%. Crude +2.4% to $67.30. Gold +0.3% to $2,550.10. Bitcoin -1.2% to $56,545.
Ten-year Treasury Yield -2 bps to 3.63%.
Today's Economic Calendar
07:00 AM MBA Mortgage Applications
08:30 AM Consumer Price Index
10:00 AM Quarterly Services Survey
10:30 AM EIA Petroleum Status Report
11:00 AM Treasury Buyback Announcement
01:00 PM Results of $39B, 10-Year Note Auction
Companies reporting earnings today »
What else is happening...
Campbell Soup (CPB) plans to drop 'soup' from its iconic name.
Sony (SONY) to release PlayStation 5 Pro priced at $700.
Nike (NKE) shareholders block proposal on human rights issues.
Google (GOOG, GOOGL) Cloud CEO details path for AI monetization.
Amazon Web Services invests £8B in the U.K. to boost data centers.
Report: 16 new GLP-1 weight-loss drugs could be launched by 2029.
Nearly half of Southwest (LUV) board will quit after pressure from Elliott.
Starbucks (SBUX) CEO: Refocusing on community coffeehouse vibe.
GameStop (GME) sees Q2 sales plummet, but turns a surprise profit.
Palantir (PLTR) Chairman Peter Thiel files to sell up to $1B in stock.