MARKET WRAPS
Watch For:
Retail Sales for August; PPI for August; Weekly Jobless Claims; Canada Wholesale Trade for July; Earnings from Adobe
Today's Top Headlines/Must Reads:
Betting Inflation Will Keep Falling Is Still a Risky Business
Fuel Prices Are Soaring. Who Is Feeling the Pinch?
UAW, Automakers Remain 'Far Apart' in Contract Talks, Union President Says
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Opening Call:
Stock futures were firmer as bond yields steadied and traders eyed retail sales data and opening action for the ARM IPO.
"After much anticipation, markets mostly took the CPI release in their stride yesterday, with bonds and equities fairly steady after the release, before a bond rally eventually took hold," Deutsche Bank said.
Markets are pricing in little chance of the Federal Reserve hiking borrowing costs after its meeting next week and remain undecided about any 25 basis point hike in November.
Those expectations may shift depending on producer prices and retail sales data.
Investors will also be keeping an eye on the opening trading of ARM. It is felt that a well-received ARM listing may help revive the IPO market and boost bullish sentiment more broadly.
"Given the eagerness from investors , it seems ARM could have pushed for an even higher price, but is playing it safe to try to ensure a surge in the share price once trading gets underway," Hargreaves Lansdown said.
Another possible catalyst Thursday is the policy decision by the European Central Bank. ECB decisions may not normally impact U.S. trading in a big way, but then it's unusual to go into a major central bank meeting without the market having a firm view of what will happen.
Read ECB May Hike Rates Again Thursday. But It's a Close Call.
Premarket Movers
Ahead of ARM's debut, shares of fellow chip makers traded higher. Nvidia rose 0.8%, U.S.-listed shares of Taiwan Semiconductor Manufacturing gained 0.9%, Intel was up 0.2%, and Qualcomm rose 0.4%.
Caesars Entertainment shares were volatile after reports that it had suffered a cyberattack and paid a ransom to hackers. The stock rose 1.5%, recouping about half of Wednesday's losses.
Ford was up 0.1% and General Motors rose 0.2% ahead of a deadline late Thursday for a strike by the United Auto Workers union.
HP was down 1.2% after Berkshire Hathaway disclosed it sold 5.5 million shares of the company.
Semtech said it expects a third-quarter loss when analysts forecast a profit. The company also guided for third-quarter sales below analysts' estimates as inflation and export restrictions pressure results. Shares fell 3.9%.
Yum China laid out plans to boost dividends and buybacks, as it updated investors on its goals through 2026. The stock rose more than 3%.
Wednesday's Post-Close Movers
Harpoon Therapeutics said Wednesday that AbbVie would not exercise an exclusive license option on its HPN217 treatment. Shares fell 7.3%.
Ibex's revenue rose 0.7%, to $124.4 million, in the fiscal fourth quarter, missing analysts' forecasts as weaker macroeconomic conditions weighed on results. The company's adjusted earnings per share also missed estimates. Shares dropped 17%.
Forex:
The inflation data, which showed headline annual CPI rose slightly more than expected to 3.7%, had only a limited impact on the dollar, which now trades slightly lower, MUFG said.
"Market participants are assuming that the Fed will put more weight on the slowing trend for core inflation when setting policy and continue to look through upside risks to headline inflation for rising energy prices."
The euro was firmer in early European trading, but it could come under pressure as traders await the outcome of the ECB meeting, DHF Capital said.
"While the ECB is facing elevated inflation, the deteriorating economic conditions in the euro area could affect its interest rate decision, creating some doubts over whether it would raise rates or keep them unchanged."
In addition, the weaker outlook for European economies, with Germany's expected to shrink this year, could continue to weigh on the euro's performance, it said.
Read Euro Movements Will Depend on ECB Decision, Rate Pause Would Disappoint
Read Sell Sterling, Buy Euro, BlackRock Says
Energy:
Oil prices rose in Europe, with Brent setting a fresh 10-month high as investors anticipated a supply shortfall throughout the rest of the year.
Brent has now risen in 11 of the last 15 trading sessions as Saudi Arabia's oil supply cuts bite, cuts that Riyadh has said it will continue until the end of the year.
OPEC and the IEA both issued reports this week which foresaw a sharp deficit forming towards the end of the year if cuts remain in place.
Metals:
Base metals prices were mixed, while gold edged lower in early London trade, as a strong dollar and the possibility of more Fed rate hikes added pressure on dollar-backed commodities.
All eyes will be on the ECB's decision on interest rates later, Peak Trading Research said.
"The euro comprises 58% of the dollar index, so today's ECB policy decision and the currency impact on our commodity markets could be significant."
Source: ADVFN
