Here are five things you need to know for Thursday, September 1:
1. — September stock futures kick off in the red
US stock futures fell again on Thursday, while Treasury bond yields jumped amid bets on aggressive Fed rate hikes as investors kicked off the market’s toughest month. in a pessimistic mood.
Weaker growth in Asia, where PMI data on Thursday points to a slowdown in the region’s three major economies, alongside the Russia-linked energy crisis in Europe and record inflation, has caused investors to lose confidence in the approach of early September, which is traditionally the month that offers the least in terms of historical returns for US investors.
Equities are also facing headwinds from the Fed’s inflation fight, with bets on a third consecutive 75 basis point rate hike to 72% in overnight trading, pulling stocks higher. Benchmark 2-year Treasury yields north of 3.5% for the first time since 2007.
Those bets were cemented by overnight comments from Cleveland Fed Chair Loretta Mester, who said at an event in Dayton, Ohio that the fed funds rate would rise “somewhat above the 4% level, adding that it was “wishful thinking” to assume that inflation had peaked.
Growth concerns remain, however, and oil prices extended an overnight trade decline amid reports of further Covid shutdowns in China that will accelerate a fall in demand from the world’s biggest energy importer.
WTI futures for October delivery fell $2.02 overnight to trade at $87.61 a barrel while Brent contacts for the same month, the global price benchmark, jumped $2.12 to trade at $93.54 a barrel.
Overnight in Asia, hopes of another round of stimulus from Beijing helped Chinese stocks to a modest gain on Thursday, although weakness in the region pulled the MSCI ex-Japan index down 1.85. % during the session.
In Europe, stocks were down 1.75% at the start of the Frankfurt session, as expectations of a 75 basis point rate hike from the European Central Bank, which meets on September 8 in Frankfurt, were now fully integrated into regional interest rate markets.
On Wall Street, futures tied to the S&P 500, which fell 4.24% last month, point to a 29-point opening bell drop while those tied to the Dow Jones Industrial Average are priced for a move down 142 points. Futures linked to the technology-focused Nasdaq point to a pullback of 130 points.
2. — Nvidia tumbles as US bans AI chip shipments to China
Nvidia Corp. (NVDA) The shares fell sharply in premarket trading after the US government ordered the chipmaker to stop exporting artificial intelligence components to customers in China.
Nvidia said in a filing with the Securities and Exchange Commission late Wednesday that the government has imposed new restrictions on the sale of its upcoming A100 and H100 chips, which are also incorporated into other Nvidia-designed products.
The chipmaker said it has earmarked $400 million in A100-related product sales for China that could be forfeited if customers don’t purchase alternative products.
“The (US government) has indicated that the new licensing requirement will address the risk that covered products may be used or diverted to a ‘military end-use’ or ‘military end-user’ in China and Russia,” Nvidia said. , adding that it does not sell products to customers in Russia.
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Nvidia shares were down 5.5% in premarket trading to point to an opening price of $142.70.
3.–Disney Mulling “Amazon-Like” Membership Program – Report
waltz disney (SAY) The shares fell slightly in premarket trading following a Wall Street Journal report that the media and entertainment group is planning an “Amazon-like” membership program.
The plans, which the Journal reported as being called “Disney Prime” among company executives, would be designed to encourage potential members to spend more on Disney-related products across its streaming, parks and merchandise categories. .
Last month, activist investor Dan Loeb, who heads hedge fund Third Point LLC, unveiled a new stake in Disney and called on management to shake up the group’s board and its sports network spin-off. ESPN.
Disney reported better-than-expected earnings for the June quarter of $1.09 per share on revenue of $21.5 billion, while total subscribers for Disney+ reached 152.1 million.
Disney shares were down 0.55% in premarket trading to show an opening price of $111.45 each.
4. — Apple shares lower as IDC slashes global smartphone outlook
Apple (AAPL) The shares were helped lower in premarket trading by an analyst report from International Data Corporation that predicted weaker-than-expected global smartphone shipments by the end of the year.
Latest report from IDC, an industry benchmark, sees global shipments fall 6.5% from last year to 1.27 billion units, thanks in part to soaring inflation , geopolitical tensions and macroeconomic headwinds that will dampen consumer demand.
Reports from last month, however, indicate that Apple remains confident heading into its busiest two quarters and expects its assembler base to build 220 million iPhones this year – keeping pace with levels. of 2021 – including 90 million of its most recent models.
Apple shares were down 0.93% in premarket trading to show an opening price of $155.76 each.
Broadcom (AVGO) Shares edged lower in premarket trading ahead of the chipmaker’s third-quarter earnings after the closing bell.
Broadcom, which has reached an agreement to buy the VMWare (vmw) the former cloud computing division of Dell Technologies (Dell) for $61 billion earlier this year, is expected to post net income of $9.56 per share on revenue of $8.37 billion.
The chipmaker said it would maintain its current dividend policy of providing 50% of its free cash flow from the prior year to shareholders, despite the acquisition of VMWare, which includes Broadcom’s assumption of ‘about $8 billion in VMware debt. Broadcom shareholders will own approximately 88% of the company once the transaction closes, with VMware owning the remaining 12%.
Broadcom shares were down 1.22% in premarket trading to show an opening price of $493.00 each.