Dow -0.57%, S&P 500 -0.67%, Nasdaq -1.02%, Russell 2000 -0.89%, SOX -1.93%, Eurostoxx -0.92%, SMI -0.42% .
Jackson Hole’s digestion continues yesterday as selling pressure appears to be easing. US equity indices even moved into positive territory mid-session to finally put some bottom back on the bell. The flood of news is thin this Monday. The absence of London’s financial hub is no stranger to this. Volatility continued to rise slightly, with the VIX up 2.5% to 26.21 on declining trading volume (9.5bn securities traded on the NYSE). On the technical side, it’s dead quiet on the S&P500 Index (SPX), which remains a respectable distance from its 50-day moving average (4017 points on the day’s low versus the 50-day at 4003 and a close at 4030) . . Sector wise, only Energy and Utilities ended the session in the green, the first supported by Oil in great shape. The barrel of WTI Light Crude broke its resistance of $95.58 (200-day moving average) and moved to $96.91 this morning. The move comes after a Bloomberg report said nuclear talks with Iran would be extended by a few weeks amid ongoing disagreements over key issues. Technology suffered yesterday, the SOX index fell almost 2%.
There is some easing on both the bond market and currencies. The yield on the US 10-year bond fell slightly to 3.09% as the dollar returned to par against the euro. Gold, on the other hand, seems to have lost its inspiration and is trading at $1733 an ounce.
We’re back to Bed Bath & Beyond (BBBY), which is up 24.77% yesterday and has rallied 52% since its August 23 low. You may remember the stock’s “meme,” which shot up to nearly $30 a share after the market broke that Ryan Cohen had bought some. The stock then fell back to just under $10, the same Ryan Cohen who resold his interest to small owners for a profit of $68 million. But then the ongoing trading volumes pick up again, wouldn’t he come back to prank them again?
If we observe the behavior of Fed funds since Jerome Powell’s speech on Friday, we see that they have logically given up on predicting a Fed rate cut in the first half of 2023. is that the market more or less reversed pretty quickly. His first reaction, for example, he’s expecting a 35 basis point drop in the second half of 2023, he’s actually been expecting it for a week and a half. Investors are likely still concerned that the Fed’s rate hikes will severely damage economic growth and force them to change course abruptly. Traders are also likely to recall that while the Fed chair is clearly hawkish today, he has turned his back on the past.
Volodymyr Zelenskyy promises to push Russian troops back to Ukraine’s borders while his army launches a counter-offensive in the south. Russian missiles kill two people and injure 24 in Mykolaiv on the Black Sea, regional governor announces. A controlled shutdown of the Zaporizhia nuclear power plant under Russian control would be the safest option, says CSN. An IAEA team will begin inspecting this facility in the coming days. Germany and France want the EU to drive a wedge between Vladimir Putin and the Russian people by launching a campaign against propaganda in Russia and adopting a visa policy that allows ordinary Russian citizens to travel to Europe. This emerges from a non-paper published ahead of today’s and tomorrow’s meeting of EU foreign ministers.
Neel Kashkari says he is “happy” that stocks around the world fell after Jerome Powell’s speech on Friday. “People now understand the seriousness of our commitment to bringing inflation down to 2%,” the Minneapolis Fed official said. He adds that he was “definitely not thrilled” last month when the stock market rallied after the FOMC meeting.
The energy crisis that has been rocking Europe for some time is being talked about more and more frequently. A few days ago, Le Monde published a very interesting article on this subject that particularly inspired me. As the Covid pandemic raged, investments in oil and gas were severely reduced, leading to a major imbalance between supply and demand, fuel supply shortages could start and drive up the price of the pillar. Then Russia began (from summer 2021) to manipulate the European natural gas market by reducing its exports and being careful not to fill Gazprom’s storage facilities in the European Union. Since the beginning of the war, Vladimir Putin has been using the supply lever to force his interlocutors to lift the sanctions against him. As a result of these successive shocks, the price of petrol has skyrocketed in the European Union, whose leaders are struggling to protect their fellow citizens by spending billions of euros in subsidies, weakening the budgets of the states of the old continent Benefit from… Vladimir Poutine. Add to this serious nuclear reactor problems in France, a widespread drought affecting hydroelectric power generation, thermal power plants that need water to cool, and coal-fired power plants that depend on fewer and fewer navigable waterways, and you have a timed energy bomb. A European political response seems increasingly urgent, it seems that an emergency meeting of energy ministers is scheduled for September 9th.
Germany will publish the inflation estimate for August at 2:00 p.m. In the United States, the FHFA Home Price Index (3:00 p.m.) will precede the JOLTS Job Opportunities Survey and the Conference Board Consumer Confidence Index (4:00 p.m.).
Microsoft is changing the terms of its cloud licenses in Europe after complaints. Uniper is asking for further help from Germany to cover the costs. Netflix would charge between $7 and $9 per month for its new offering with advertising in the US, up from $15.49 currently for its most popular offering. Pierer Mobility is raising its sales forecast for the 2022 financial year thanks to a relaxation in the supply chain. According to the FDA, Philips is recalling certain Respironics devices due to possible plastic contamination.
Tonight and this morning indices are trading up in Asia except for the Chinese financial hubs with Hong Kong down 0.49% and Shanghai down 0.35%. Tokyo is up 1.14% on the IPO and Seoul is up 0.99%. The SPX future is up 0.3%, while Europe is up 0.4% as of 9am.
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