Stocks fell on Thursday as investors await Fed Chair Jerome Powell’s remarks at the Jackson Hole Economic Forum. The S&P 500 index had its worst day since the early August turmoil, closing down 0.9% on the day. The DJIA fell 0.4% while the Nasdaq lost 1.7%. 10-year Treasury yields rose 8.5 basis points to 3.062%, their biggest gain in a week.
While investors will be listening carefully for any additional indications about the timing, duration and magnitude of the Fed’s rate cute campaign, the July FOMC minutes made it pretty clear that the committee is set to deliver a reduction in short-term rates at its September meeting. Don’t expect too much from JP though, he tends to be pretty savvy about keeping the Fed’s options open by categorizing future decisions as ‘data dependent.’ FWIW, fed funds futures are pricing in 100 basis points of cuts in the remainder of 2024, which means one would have to be 50, rather than 25 basis points.
In labor market news, revisions to payroll data this week suggest that labor growth is more moderate than initially reported. To be fair, analysts widely expected these downward adjustments and the BLS’ figures were not as bad as many anticipated.
sources: CNBC, Bloomberg, WSJ
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Sweater weather comes early
Starbucks’ famed harbinger of fall, the Pumpkin Spice Latte is returned yesterday, along with the rest of the chain’s fall menu. This is the earliest the PSL has been released in its tasty two-decade history. The company is looking to spice up (oof), its numbers after two consecutive quarters of same-store sales declines. Approximately 10% of Starbucks’ revenue come from seasonal items.
sources: Bloomberg, WSJ, CNBC
“If you want to make a wrong decision, ask everyone.” – Naval Ravikant
Good news at the pump
Crude oil is trading at some of its lowest levels of the year. While this isn’t great for producers, it’s good news for consumers. Despite the U.S. being in the midst of peak driving season, the average cost of gas in the states has been around $3.40 per gallon, down 12% versus a year ago according to AAA. Lackluster demand from China has pressured oil and refined prices.
sources: WSJ, Bloomberg
Everyone loves a bargain
Target joined Walmart and TJMaxx in luring in shoppers with discounts on staple items to boost sales. The company’s same-store sales rose 22% and profits jumped 36% last quarter. While discounters are posting strong numbers, higher-end stores are continuing to struggle in the face of increasingly price sensitive shoppers.
sources: WSJ, FactSet, CNBC, Bloomberg
Not loving it
Hackers hijacked a McDonald’s social media account to run a memecoin scam based on the company’s character Grimace. A screenshot going around online showed the company’s bio changed to a message the hackers discussing details of the scam. Mickey D’s send that it was “aware of an isolated incident” and that it had been resolved.
sources: WSJ, CNBC, Bloomberg
Crypto
According to crypto specialist K33 Research, a metric known as the funding rate for perpetual Bitcoin futures is pointing to growing risks of a short squeeze. The metric supposedly helps gauge the bullish and bearish sentiment of speculators. The 7-day average funding rate is at its lowest level since early 2023. Low levels suggest aggressive shorting, creating the conditions for a possible short squeeze, per the report.
source: Bloomberg
The stinger
Disclaimer
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