The DOW-JONES rises 0.22% to 31,173 points, due to the 0.30% recorded on S&P 500, at 3,944 points. The NASDAQ100, for its part, rose 0.37% to 11,672 points. During yesterday’s session, the Dow sank 3.94%, while the S&P 500 fell 4.32%. The biggest punishment was for the Nasdaq Composite, which fell 5.16%.
All three indices were coming off four straight days of gains. However, the inflation data for August woke up all the ghosts of the market. The CPI not only did not fall in monthly terms despite the fall in gasoline prices, but also increased by 0.1%. In year-on-year terms, it eased to 8.3%, when the market had expected 8.1%.
“It has caught the market off guard,” says Quincy Krosby of LPL Financial. “The market was at least expecting it to stabilize, maybe not to the downside, but certainly not to the upside. It was the wrong direction and the concern of course always translates to what this means for the Fed.”
The operators are now divided between a Fed hike of 75 or 100 basis points at the meeting that the institution will hold on September 20 and 21. The probability of a 100 basis point rise has risen to 33% from 0%, while the chance of a three-quarter point rise has fallen to 67%, from 91% the day before. Nomura economists also expect a full percentage rise.
Today the investors have known shortly before the opening the producer price index (PPI)an indicator of the prices received at the wholesale level, which fell by 0.1%. Excluding food, energy and business services, the core PPI increased 0.2%. In year-on-year terms, the headline PPI increased by 8.7%, which is a significant setback compared to the 9.8% increase in July and the smallest annual increase since August 2021. The core PPI increased by 5.6% with compared to a year ago, matching the lowest rate since June 2021.
Today the market will closely follow the price of Alphabet. The Court of the European Union has confirmed the fine to Google for the Android case, although has reduced the amount of the sanction after partially admitting the appeal made by the technology company. The dispute in court dates back to 2018, when Brussels imposed the record fine on Alphabet, the parent company, for 4.34 billion euros. After a final chapter in the procedure, European justice maintains the sentence, although it lowers the figure to 4,125 million euros (218 million less). However, he maintains that Google has abused its dominant position with the Android operating system. The company can still appeal to a higher instance, the Court of Justice of the European Union.
Among today’s protagonists is starbuckswhich has raised its long-term financial forecasts after outlining a series of changes that will come to its cafeterias as part of its reinvention plan.
The Seattle-based company projects earnings-per-share growth of between 15% and 20% annually for the next three years, up from its previous long-term forecast given at the end of 2020. that sales at comparable stores worldwide and in the US grow between 7% and 9% annually.
Johnson&Johnson also fuel a bullish open after announcing that the Board of Directors has authorized the repurchase of up to 5,000 million dollars of common shares of the company. The buyback program has no time limit and may be suspended for periods or terminated at any time. The company had approximately 2,629.2 million shares of common stock outstanding as of July 22, 2022.
The pharmaceutical giant has also reaffirmed its full-year 2022 adjusted operating sales and earnings per share growth forecasts of 6.5% to 7.5% and $10.65 to $10.75 per share. , respectively.
Nucor falls 5% after the steelmaker released disappointing third-quarter earnings forecasts. The company expects earnings per share to be between $6.30 and $6.40, well below a market forecast of $7.56.
slight progress for modern after the CEO of the pharmaceutical company, Stéphane Bancel, has opened the door to supply vaccines against Covid-19 to China.
Regarding the recommendations of the analysts, the Berenberg experts have lowered their recommendation on Bristol Myers Squibb from ‘buy’ to ‘hold’. The broker considers that he no longer has room to continue rising, after having revalued 14.8% so far this year.
Better prospects sees Berenberg for Merckwhich raises the advice from ‘hold’ to ‘buy’ with a rise also in the target price that gives it a potential revaluation of 17%.
Meanwhile, in the commodity markets, oil prices are stabilizing after having been falling in the early hours of the morning, after a report from the International Energy Agency (IEA) has allayed some fears about the demand for black gold despite the prospect of recession.
The IEA forecasts a large-scale switch from gas to oil, estimated at an average of 700,000 barrels per day (bpd) between October 2022 and March 2023, twice as many as a year ago. The IEA said observed global inventories fell by 25.6 million barrels in July.
The oil futures Benchmark Brent in Europe rose a slight 0.09% to $93.25 a barrel. West Texas Intermediate is priced at $87.35 a barrel, up 0.05%.
In fixed income, bond yields continue to rise as investors try to digest yesterday’s inflation figures. The yield of the two-year bond rises another point to 3.773%, again a stone’s throw from its highs in November 2007. In the ten-year bond, the yield climbs to 3.439%, and the 30-year paper pays 3.517%.