Today’s Big Picture
Asia-Pacific equity markets finished the day mostly lower except for Hong Kong’s Hang Seng, which gained 0.37% in a mixed session led by Utilities and Non-Energy Materials. China’s Shanghai Composite, which ended the day essentially flat, down a mere 0.03% while Taiwan’s TAIEX fell 0.37%, Australia’s ASX All Ordinaries declined 0.45%, South Korea’s KOSPI gave back 0.60%, and Japan’s Nikkei closed 0.87% lower on semiconductor chip company declines. India’s markets are closed today as the country observes Ganesh Chaturthi, a Hindu festival marking the birthday of the Hindu deity Ganesh, the god of prosperity and wisdom. European markets are higher in midday trading and U.S. equity futures point to a positive open.
Markets seem to be ready to accept a “no action” Fed meeting tomorrow based on Fed Fund futures having priced in a 99% chance of rates remaining the same after tomorrow, per the CME FedWatch website. Given rising oil prices with West Texas Intermediate (WTI) trading over $91 and Brent Crude creeping toward $95 there is a sense that the Fed may need to resume its inflation-fighting efforts in November. Futures are pricing in a 29% chance of another 25 basis point hike (0.25%) at the November 1 meeting so it’s on our collective radar but not something markets are calling for at this point, anyway.
For now, the Fed taking uncertainty out of the rate discussion is one less distraction for the market as it works to generate some momentum on the heels of last week’s ARM Holdings (ARM) IPO and today’s Maplebear (CART) IPO, owner of Instacart (more below). Given that we are in between earnings seasons, having something to get excited about besides feeding our data dependency on economic releases is worth celebrating.
Data Download
International Economy
The Eurozone’s August CPI update came in slightly cooler than expected at 5.20%, 0.10% lower than estimates. Core CPI held firm at 5.30% as overall inflation continues to be more sticky than citizens and central bankers care for. Items driving this YoY Core CPI stickiness include Furnishings, Household Equipment and Routine House Maintenance (6.0%), Recreation and Culture (6.6%), and Restaurants and Hotels (7.7%). Top-line CPI is further impacted by Food and Non-Alcoholic Beverages (11.6%) and Alcoholic Beverages (7.6%).
Domestic Economy
8:30 AM ET sees the release of the August update for Housing Starts and Building Permits. Permits expected to moderate slightly to 1.438 million from July’s 1.443 million figure. Starts are expected to have rolled over on a MoM basis showing a 0.80% decline from the previous month’s 3.90% growth pushing the Seasonally Adjusted Annual Rate (SAAR) to 1.440 million from the previously reported 1.452 million starts. While trending lower, these figures speak to the economy responding to the Fed’s high inflation medicine without succumbing to any malignant side effects.
Markets
Broad markets were technically positive almost across the board in advance of today’s housing update and Wednesday’s Fed meeting as the Dow (0.02%), the Nasdaq Composite (0.01%) and the S&P 500 (0.07%) ended the day essentially flat, while the Russell 2000 traded off 0.69%. Sectors were mostly lower except for Technology (0.27%) and Energy (0.11%). Propping up broad indexes was Apple (AAPL), which traded up 1.69%, and oil, which saw the Brent Global Spot price close above $94 for the third trading day in a row. Going against these supports was Moderna (MRNA) which saw shares bid down 9.12% on expectations of lower than expected future demand for Covid vaccines.
Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: 4.46%
- S&P 500: 15.99%
- Nasdaq Composite: 30.99%
- Russell 2000: 4.15%
- Bitcoin (BTC-USD): 61.17%
- Ether (ETH-USD): 36.66%
Stocks to Watch
Before U.S. equity markets begin trading today, Apogee Enterprises (APOG), AutoZone (AZO), and Endava (DAVA) will report their quarterly results.
Stitch Fix (SFIX) announced earnings last night, posting revenues of $375.8 million, coming in higher than the $372 million estimate despite an active client count of 3.297 million in 2023 versus analyst consensus of 3.353 million. Earning per share improved to a $0.24 loss from $0.89 for the same period in 2022 but still came in $0.03 below estimates. The company stated it will be winding down its UK operations over the next few months and that it sees headwinds coming into the 2024 fiscal year with estimated 2024 revenues targeted between $1.30 to $1.37 billion as compared to $1.6 billion for FY 2023.
The Cola wars are apparently still alive and kicking, in India at least. It has been reported that Burger King India is in “advanced negotiations” with Coca-Cola (KO) to have the soft drink manufacturer replace long-time rival PepsiCo (PEP) in all locations throughout India.
Block (SQ) filed an 8-K last night, announcing that current CEO Alyssa Henry will be stepping down from her role on October 2, after 9-plus years at the company. She will be succeeded by former Twitter CEO Jack Dorsey and will assume the title of “Block Head and Chairperson” and “will also serve as the Square Head.”
IPOs
Instacart owner Maplebear Inc (CART) priced its IPO last night at $30.00 per share, hitting the top end of valuation estimates, giving the company a valuation of just over $8 billion. Shares start trading on the Nasdaq today. Readers looking to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
Steelcase (SCS) is slated to report its quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Wednesday, September 20
- Japan: Imports/Exports – August
- China: Loan Prime Rate – September
- Eurozone: New Car Registrations – August
- Germany: Producer Price Index – August
- UK: Inflation Rate, Producer Price Index – August
- US: Weekly MBA Mortgage Applications
- US: Weekly EIA Crude Oil Inventories
- US: FOMC Rate Decision and Economic Projections
Thursday, September 21
- UK: Bank of England Interest Rate Decision
- US: Weekly Initial & Continuing Jobless Claims
- US: Philadelphia Fed Index – September
- US: Existing Home Sales – August
- US: Leading Indicators – August
- US: Weekly EIA Natural Gas Inventories
Friday, September 22
- Japan: Inflation Rate – August
- Japan: Jibun Bank Flash Manufacturing and Services PMIs – September
- UK: Retail Sales – August
- Eurozone: HCOB Flash Manufacturing and Services PMIs – September
- UK: S&P Global/CHIPS Flash Manufacturing and Services PMIs – September
Thought for the Day
“I’m not crazy about reality, but it’s still the only place to get a decent meal” ~ Groucho Marx
Disclosures
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
