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Morning Briefing: August 29, 2023 – Market Uncertainty, Corporate Earnings, and Key Economic Data Releases

Good morning and welcome to your daily briefing for August 29, 2023. We have a busy day ahead with a mix of market volatility, corporate earnings, and key economic data releases on the horizon. Let’s delve into what you need to know to navigate the markets effectively.

Stock Market Outlook: Lower Open but Low Conviction

U.S. stock markets appear to be headed for a lower opening today, following yesterday’s gains. However, both buyers and sellers seem to lack strong conviction. Contracts on the S&P 500 and Nasdaq 100 fluctuated before indicating a downward trend. Despite a challenging August, traders remain optimistic but cautious, keeping an eye on key economic data that could influence Federal Reserve decisions.

Treasury Yields: Mixed Movements

The 2-year note yield has decreased by four basis points, standing at 5.02%. On the other hand, the 10-year note yield has inched up by one basis point to 4.22%. These mixed signals point to continued uncertainty among investors regarding short-term and long-term economic prospects.

Today’s Economic Calendar: Data to Watch

  • Consumer Confidence Index for August: Released at 10:00 a.m. ET, this report will give insights into consumer spending intentions, a critical driver of the economy.
  • July JOLTS – Job Openings Report: Also scheduled for 10:00 a.m. ET, this data will provide a snapshot of the job market and could influence Federal Reserve policy decisions.
  • June FHFA Housing Price Index and June S&P Case-Shiller Home Price Index: Released at 9:00 a.m. ET, these indices will shed light on the housing market’s health.

Corporate Earnings: Highlights

  • Best Buy: Beat EPS estimates by $0.16 but saw a forecasted decline in FY24 comp sales between 4.5-6.0%.
  • J.M. Smucker: Beat on EPS by $0.19 but missed on revenue.
  • AT&T and Verizon: Both stocks were upgraded to ‘Buy’ from ‘Neutral’ at Citigroup.
  • Toyota: Halted Japan production due to a system issue.
  • HEICO: Beat EPS estimates by $0.01 and also beat on revenue.
  • NIO: Missed both EPS and revenue estimates, but guided Q3 revenues above consensus.
  • Pinduoduo: Beat EPS and revenue estimates, showing strong performance.

Global Market Trends: Europe and Asia

  • European stocks are doing well, particularly in the mining sector. German 10-year yields have fallen three basis points to 2.54%.
  • The UK market is outperforming, buoyed by a slower increase in grocery bills that has eased inflationary pressures.
  • Asian markets are up, with China announcing plans to cut interest rates on home mortgages, signaling further measures to bolster its economy.

Commodities: Oil and Gold

Oil prices are climbing toward $81 per barrel as traders await clues on demand outlooks in the U.S. and China. Gold prices remain relatively stable.

Final Thoughts

Today will be a crucial day for market participants who are looking for signs to confirm the direction of economic trends. With Jerome Powell’s recent comments at the Jackson Hole symposium suggesting a readiness to raise rates based on data, today’s economic releases could offer significant clues.

Investor sentiment is cautiously optimistic but is teetering on the brink of uncertainty. Keep an eye on the Consumer Confidence and Job Openings reports, as these could be the game-changers for today’s market direction.

That’s all for this morning’s briefing. Stay tuned for a day of market-moving events and make informed decisions.




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