Wall Street was lower as selloffs resumed in big techs ahead of the US CPI release later today. Consensus calls for a 3.6% increase in the headline CPI for August, up from 3.2% in July, which may strengthen the odds for the Fed to hike the interest rate at least one more time this year. The tech-heavy index, Nasdaq, slid more than 1% as Apple’s shares fell 1.7% on the new product launch, which includes the iPhone 15 and the new Apple Watch Series 9. Oracle’s stocks shed 13% following soft quarterly results and disappointing guidance due to weakened cloud license revenue. By contrast, the cyclical sectors, such as energy and financials, finished higher in the S&P 500, suggesting inflation trades were leading the trend amid rising energy prices and “higher-for-longer” rate expectations.
The US dollar found its footing as markets continued pricing in the hawkish stance of the Fed. USD/JPY rose to above 147 again, and the Eurodollar was flat against the dollar after bouncing off a session low. The Chinese Yuan consolidated above the recent low against the king dollar after the PBOC vowed to stabilize its currency.
Futures point to a mixed open across the APAC region, with the Nikkei 225 futures up 0.04%, the ASX 200 futures down 0.25%, and the Hang Seng Index futures up 0.56%.
Price movers:
- 8 out of 11 sectors finished lower in the S&P 500, with Technology and Communication Services leading losses, down 1.75% and 1.06%, respectively. Energy outperformed, up 2.31%, due to a jump in oil prices. The Financial sector also finished higher on the comeback of banking stocks.
- Apple raised the price for its top-end iPhone, the iPhone 15 Pro Max, to US$1,199, US$100 more than the previous version at the new product launch event. The new pro iPhones have titanium frames. Apple also unveiled the Apple Watch Series 9 and Apple Watch Ultra 2, with new wireless chips, sensors, and S9 chips. It is also marketed as the first carbon-neutral device.
- BP’s shares fell nearly 2% on the US markets following CEO Bernard Looney’s resignation due to unclear relationships with colleagues prior to becoming CEO. The CFO, Murray Auchincloss, will serve as interim CEO.
- Bitcoin rebounded to above 26,000 from the selloff on the previous day. The recent selloff was sparked by fears of possible FTX liquidations, which was reportedly holding US$7 billion worth of digital assets, including US$1.16 billion worth of Solana and US$560 million worth of bitcoin.
- Crude prices rose to the highest since November 2022 on tight supply concerns. OPEC forecasts that the oil demand could rise by 2.25 million barrels per day in 2024 while indicating to continue the output cuts to the end of 2023 last week. The recent improvement in the Chinese economic data also added to oil’s upside momentum.
ASX and NZX announcements/news:
- Tietto Minerals Ltd. (ASX: TIE) produced about 25,000 ounces of gold at Abuja during 1H CY2023, with 9,043 ounces in Q1 and 15, 563 in Q2, up 72% from the previous year.
Today’s agenda:
- New Zealand FPI for August
- Japanese BSI Manufacturing Index and PPI for August
- UK GDP for July
- US CPI for August
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