Here are five things you should know for Thursday, September 15:
1. – Stock Futures Rise, Dollar Resumes Rising
US stock futures rose on Thursday, while the dollar collected gains against its global peers, as investors continue to closely track interest rate markets ahead of next week’s Federal Reserve meeting.
Stocks remain deeply in the red when compared to Monday’s closing levels, however, after the biggest sell-off in two years on Tuesday, driven by a faster-than-expected reading of August inflation and a corresponding rise in Fed rate hike expectations.
The odds of an unprecedented move of 100 basis points, which would be the largest since 1984, are flat at around 26%, based on data reflected in CME Group’s FedWatch, with bets on subsequent hikes likely to push the fed funds rate to between 4.25% and 4.5% by the end of February.
Meanwhile, bond markets continue to issue stagnation warnings about a recession, with the spread between two-year bond yields — which have been trading at the highest levels since 2007 — now about 38 basis points higher than the yield on 10-year bonds. .
Meanwhile, the dollar index recorded a gain of 0.03% in the evening session at 109.662, while the euro settled below par at 0.9995.
Currency and bond market moves have set a backdrop in which stocks are struggling to find traction in the market as only good economic news increases the chances of prices rising deeper, while inflation data itself is not slowing down fast enough to allow bets to pause in the Fed’s tightening cycle.
However, European shares posted a 0.22% gain in early trading in Frankfurt, following a 0.2% rise for the Nikkei 225 in Tokyo and the ex-MSCI Japan index slipping 0.16% regionally.
On Wall Street, S&P 500-related futures point to a modest two-point gain at the opening bell ahead of the August retail sales data and weekly jobless claims before trading begins. The contract related to the Dow Jones Industrial Average is priced up 40 points while the contracts linked to the technology-focused Nasdaq Index indicate a move of 2 points to the upside.
2. – Retail sales data in focus amid lower gas price
Consumer demand will take center stage on Wall Street on Thursday with the release of retail sales data for August ahead of the start of trading.
After Tuesday’s surprisingly rapid inflation reading, which showed a big jump in core consumer prices and a faster-than-expected 8.3% headline rate, investors will focus on whether there is a corresponding increase in demand. A rise in inflation, without a demand component, would be even more worrisome.
Analysts expect total retail sales to fall about 0.1% from their July levels, but that will depend on the total value and represent the significant drop in gas prices on a monthly basis. However, if sales show gains on a volume basis, investors will find comfort in the fact that consumers are using the money saved from lower pump prices to spend across different sectors of the economy.
The Commerce Department will release the numbers at 8:30 a.m. ET.
3. – Disney Edges Up As CEO Chapek Touts ESPN Potential
Walt Disney (dis) Stocks rose in pre-market trading after an upbeat speech from CEO Bob Chapek at a technology and media industry conference late Wednesday in San Francisco.
During a question-and-answer session at the Goldman Sachs Communacopia + Technology conference, Chapek said he sees “strong” consumer demand for the group’s garden business next year, with a rebound in international park visitor numbers already underway after two years of pandemic restrictions.
He also reiterated the media group’s view that ESPN sports network is the best within the broader Disney company, after a few weeks of lobbying from activist investor Dan Loeb to consider firing it. He also noted the potential for sports betting on ESPN’s revenue and potential in the coming years.
Disney shares were up 0.4% in premarket trading to indicate an opening bell price of $112.95 per share.
4. – Shell Names Renewables Boss as New CEO
Shell plc (shill) Shares rose on Thursday after Europe’s largest energy company said Chief Executive Ben van Beurden would step down later this year.
Wael Sawan will replace Van Beurden, a longtime Shell CEO who has led the group since 2014, and who currently runs the gas and renewable energy division of the energy giant on January 1, shortly before it moves its global headquarters from The Hague to London.
“It has been an honor to work alongside Ben and I am honored to take the helm of such a great company from him,” Sawan said. “We will be disciplined and focused on value, working with our customers and partners to deliver the reliable, affordable, and cleaner energy the world needs.”
US-listed Shell shares were up 0.22% in pre-market trading to indicate an opening bell price of $54.33 per share.
5. – Ether drops after successful Ethereum “merger”
Last night, a historic ‘merger’ of two blockchain networks, one of which backs the world’s second largest cryptocurrency, was completed, creating what could be a major challenge to Bitcoin’s dominance in the digital token market.
The Ethereum blockchain, on which the Ether token is built, has completed a highly technical overlap with a newly developed system that will significantly reduce the amount of power required to verify individual transactions and create new tokens.
By removing Proof of Work for transaction validation (which requires massive amounts of electricity to power computers) with Proof of Stake (a way that validators can put any of their tokens as collateral to perform essentially the same task) The new Ethereum 2.0 blockchain becomes more efficient and environmentally sustainable at the same time.
The merge itself, despite many years in the making thanks to the work of specialized coding developers, was completed and broadcast live on YouTube in just about 12 minutes.
Ether tokens were last seen down 1.8% in the session with the coins trading at $1,601.16 each.