As the sun rises on September 6, 2023, let’s get you up to speed with the critical market updates you need to know. Today, we delve into a mixed bag of economic indicators, corporate news, and international market shifts that could impact your investment strategy.
—
Market Overview: A Gloomy Start
The day kicks off on a somber note as stock futures point to a lower open. Airlines are sounding the alarm bells over surging jet fuel costs. Consumer discretionary spending is also likely to be hit due to high gas prices. Not to forget, the ever-present worry about rising interest rates is casting a cloud over the market.
—
Key Economic Data: Numbers You Can’t Ignore
Mortgage Applications Drop
The Mortgage Bankers Association (MBA) has released its weekly index, and the numbers aren’t pretty. Purchase applications have slipped by 2.0%, and refinance applications have seen an even steeper decline of 5.0%. Overall, the MBA Mortgage Applications Index has dipped by 2.9%.
Treasury Yields
Treasury yields are showing minor fluctuations, with the 2-yr note yield dropping two basis points to 4.94%, and the 10-yr note yield also down two basis points at 4.24%.
Today’s Economic Calendar
– 8:30 ET: July Trade Balance — Expected -$68.0 bln; Prior -$65.5 bln
– 9:45 ET: Final August S&P Global US Services PMI — Prior 51.0
– 10:00 ET: August ISM Non-Manufacturing Index — Expected 52.4%; Prior 52.7%
– 14:00 ET: September Fed Beige Book
Keep an eye out for these, as they can set the market tone for the rest of the day.
—
Corporate Highlights: The Winners and Losers
Upgrades
– Toast (TOST): Upgraded to ‘Buy’ from ‘Neutral’ at UBS, with the stock showing a healthy 4.8% gain.
– Constellation Brands (STZ): Upgraded to ‘Outperform’ from ‘Market Perform’ at TD Cowen, indicating a 1.1% rise.
Financials and Downgrades
– Roku (ROKU): The company is optimistic about its Q3 revenues but plans to cut its workforce by 10%.
– Enbridge (ENB): Acquires three U.S.-based utilities from Dominion Energy for $14.0 billion.
– Zscaler (ZS), HealthEquity (HQY), GitLab (GTLB), and AeroVironment (AVAV): All beat earnings estimates and provided optimistic forward guidance.
– Block (SQ): Downgraded to ‘Neutral’ from ‘Buy’ at UBS.
– Southwest Air (LUV): Updated its Q3 guidance, warning of a 5-7% drop in Revenue per Available Seat Mile (RASM).
– NextGen Healthcare (NXGN): Enters into a definitive agreement to be acquired by Thoma Bravo for $23.95/share in cash.
—
Global Market Movements: A Wobbly Stage
European Despondency
European stocks aren’t faring well either. The Stoxx 600 index is down 0.8%, marking its sixth consecutive session in the red. Elevated oil prices and disappointing German data are spooking investors.
Dollar Strengthens, Yen Weakens
The U.S. dollar continues to hold strong, buoyed by a robust outlook for the U.S. economy. In contrast, the yen has hit a 10-month low against the dollar, prompting Japan to issue a stern warning against its rapid decline.
Oil and Commodity Markets
Brent crude is oscillating just below the $90 per barrel mark. Goldman Sachs and UBS Global Wealth Management have issued bullish outlooks for Brent and the US WTI benchmarks by the end of the year.
—
What Lies Ahead: A Cautionary Tale
The mixed economic indicators, coupled with corporate news and global market movements, suggest a turbulent market environment. Investors must tread carefully, especially given concerns of rising fuel costs and interest rates.
Whether you’re an investor focused on short-term gains or a long-term planner, these market trends provide a crucial backdrop against which to evaluate your financial moves. So keep these insights handy as you navigate the complex world of investments today.
That’s all for this morning’s briefing. Stay tuned for more updates and have a profitable day ahead!
—
Feel free to share this briefing, and for the latest financial news and analysis, subscribe to our newsletter.
*Disclaimer: The information provided is for informational purposes only and should not be considered financial advice.*