Here are five things you need to know for Thursday, August 18:
1. — Stock futures fall in Fed minutes
U.S. stock futures fell on Thursday, while the dollar held on to gains against its global peers, as investors scrutinized details from the Federal Reserve’s latest policy meeting that suggest a hawkish approach to the hikes rates as the final months of the year approach.
Minutes from the Fed’s July meeting indicated that Chairman Jerome Powell and his colleagues would take a measured approach to their fight against inflation, with reliance on data overriding a pre-determined set of rate hikes, but nevertheless noted that inflation remained “uncomfortably high” in the world’s largest countries. the economy despite the recent decline in the headline CPI.
The Fed will see two releases of PCE price index data, its favorite inflation gauge, a jobs report in August and another monthly CPI reading ahead of its next interest rate decision on September 21.
“Some participants indicated that once the policy rate had reached a sufficiently restrictive level, it would probably be appropriate to maintain this level for a while to ensure that inflation was firmly on the way back to 2% “, reads the report. “Participants agreed that by rapidly raising the policy rate, the Committee was acting decisively to lower inflation to 2% and anchor inflation expectations at levels consistent with this longer-term objective.”
Bets on another massive Fed rate hike in September fell to around 38.5% after yesterday’s minutes, from around 50% last month, as 2-year Treasury yields slipped by 3 basis points to 3.285% in overnight trading.
Central banks around the world – at least beyond China – remain firmly in tightening mode, however, with Norway’s Norges Bank adding to the list on Thursday after a 50 basis point hike that lifted its key rate at 1.75%, the highest in a decade.
With inflation soaring in Europe, where harmonized consumer prices are rising at a rate of 8.9%, the dollar is holding onto its recent gains against its rivals, with the dollar index up 0.18 % to 106.753.
Europe’s benchmark Stoxx 600 index was down 0.13% at the start of the Frankfurt session, following a weaker session in Asia that saw the MSCI ex-Japan index fall 0.54% at the close. steps.
Oil added to yesterday’s gains in overnight trading following Department of Energy data that showed national crude inventories fell 7.1 million barrels last week, as Crude exports accelerated to around 5 million barrels per day.
WTI crude futures for September delivery rose 87 cents to $89.10 a barrel while Brent contracts for October, the global benchmark, gained $1.28 to $94.96 a barrel.
On Wall Street, futures tied to the S&P 500 point to a modest opening bell drop of 2.5 points while those tied to the Dow Jones Industrial Average are priced for an 11-point drop. Tech-focused Nasdaq futures are pointing down 13 points.
2. — Cisco shares a jump after fourth-quarter earnings beat
Cisco Systems (CSCO) Shares jumped in premarket trading after the world’s largest maker of computer networking equipment posted better-than-expected fourth-quarter earnings as supply chain pressures eased
Cisco said non-GAAP adjusted earnings for the three months ending July, the group’s fourth fiscal quarter, were 68 cents per share, down 4% from the same period last year. last and a penny ahead of the Street consensus forecast. The group’s revenue, Cisco said, was essentially flat from a year ago at $13.1 billion, beating analysts’ estimates of a total of $2.73 billion.
Orders rose 15% from the previous quarter – although down about 6% from the same period last year – to the second highest total in the company’s history. business as supply chains improved and Cisco reached an exceptionally strong comparable base in 2021.
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Looking to its next fiscal year, Cisco said it expects fiscal year 2023 revenue growth of between 4% and 6%, implying a total of $53.2 billion at the top end of the year. its forecast, with earnings between $3.49 and $3.56 per share.
“We expect to continue to experience higher costs in the near term, primarily due to higher component, freight and logistics costs, which is reflected in our Q1 guidance,” CEO Chuck said. Robins. “However, as you will see in our full year guidance, we expect this margin pressure to begin to ease as the year progresses. gives me confidence in our future.”
Cisco shares rose 4.25% in premarket trading to point to an opening price of $48.64 each.
3. — Bed, Bath & Beyond slumps as Ryan Cohen moves to Dump Stake
Bed, bath and beyond (BBBY) Shares fell sharply in premarket trading after key investor Ryan Cohen filed forms with the Securities and Exchange Commission to sell his entire stake in the struggling home goods retailer.
Cohen’s RC Ventures, which bought call options on shares of Bed, Bath & Beyond earlier this year and has an 11.8% stake in the group, is seeking to sell around 9.45 million shares, according to Form 144 filed Wednesday evening, worth approximately $148.5. million.
Shares of Bed, Bath & Beyond have risen more than 350% in the past three weeks, on particularly large trading volume, amid a surge in interest in the stock which could also be linked to a so-called ‘short squeeze’ that seeks to punish investors betting against a particular security.
Shares of Bed, Bath & Beyond were marked down 11.7% in premarket trading to point to an opening price of $20.38 each.
4. — Apple reportedly plans iPhone launch for September 7
Apple (AAPL) The shares fell slightly in premarket trading amid reports that the tech giant is preparing to launch its latest series of iPhones early next month.
Bloomberg reported late Wednesday that Apple will hold an iPhone 14 launch event on September 7 – just two days after the group expects employees to return to the office – as it seeks to unveil a series new products, including Apple Watch, Mac and iPad lines, for the holiday season.
Apple has braced for continued iPhone demand this year, despite a decline in global consumer confidence and a cautious outlook from its major assembler Foxconn earlier this month. Apple expects its assembler base to build 220 million iPhones this year — at 2021 levels — and told investors in July that overall revenue growth in the current quarter is likely to top gains in the three months ending in June.
Apple shares were down 0.72% in premarket trading to show an opening price of $173.30 each.
5. — Housing returns to center stage with sales of existing homes on the bridge
Housing data is back in focus after a weaker-than-expected reading for housing starts and permits earlier this week, with new numbers on existing home sales likely to confirm a sharp drop in transactions and demand.
With interest rates rising and mortgage rates following suit, new applications fell this week, according to data from the Mortgage Banker’s Association, pushing up the average cost of payments for homebuyers by more than 50% compared to the same period last year.
This should boost demand in a market already suffering from a lack of new inventory, although sellers are now starting to pile into the market with new homes for sale as they seek to grab what could be the latest round of a multi-year property award. rally.
Existing home sales are expected to fall 5.4% from last month to an annualized rate of 4.89 million when the data is released at 10:00 a.m. EST, bringing the total decline since the beginning of the year at around 25%.