This morning’s consumer sentiment survey, all eyes were on the inflation outlook
The University of Michigan consumer sentiment survey for August will be released at 10 a.m., and investors will be watching the inflation component with particular interest.
Economists polled by Dow Jones expect the survey to register a reading of 52.5, slightly better than July’s 51.1 and just outside the historic low of 50 hit in June.
The June reading was particularly significant, not only for the high-level measure, but also because it showed a higher mark in inflation expectations. Respondents kept their one-year forecast at 5.3%, but raised their five-year forecast by 0.3 percentage points to 3.3% (later revised to 3.1%).
A combination of record low sentiment and rising inflation fears prompted the Federal Reserve to signal an 11th-hour hike from a 0.5 percent rate hike to 0.75 percentage point.
The July survey showed a decline in the 5-year forecast to 2.9%, but the Fed raised another three-quarters of a point anyway. Surveys of consumer sentiment are often closely tied to gas prices, which have fallen sharply over the past month.
– Jeff Cox
Where the rally is
Nearly two months removed from their June lows, the three major averages have made big gains but still remain well below their record highs.
Here’s where each entered Friday:
Here’s the Dow:
- a record low of 9.8%
- Minimum 11.5% discount in June
The S&P 500 is:
- a record low of 12.7%
- The June low is 14.7% lower
Nasdaq Composite:
- a record low of 21.17%
- 20.0% off June’s lowest price
– Jesse Pound
The House of Representatives prepares to vote on climate, health care and tax package
The House of Representatives will vote on Friday on the “Inflation Relief Act,” a sweeping bill that would provide hundreds of billions of dollars in energy and health care. It also includes some tax reform measures, including around corporate taxes.
The bill passed by the Senate on Sunday provides $369 billion to fight energy security and climate change, making it the largest climate package in US history.
The package seeks to accelerate the development of renewable energy in the United States while promoting local supply chains.
The bill comes after months of debate among lawmakers after Sen. Joe Manchin voted against the Build Back Better bill.
– Pippa Stevens
Apple shares are higher in the premarket
Apple shares were in the green chase A report from Bloomberg News The iPhone maker still expected to produce roughly the same number of smartphones this year as it did last year. According to the report, it also recommends that suppliers produce the latest generation of iPhones this year as early as 2021.
If true, it would counter concerns about a global economic slowdown affecting iPhone demand. Apple shares are down just 5% this year after rising at least 30% in June. Shares were up about 0.2% in premarket trading.
– John Melloy
UK economy shrinks in second quarter as cost of living crisis bites
European markets are rising cautiously as investors follow the data, monetary policy path
European markets It was slightly higher on Friday, as investors gauged the course of monetary policy and economic growth.
All over Europe Stoxx 600 Travel and leisure stocks rose 2.7% to 0.4% in early trade as most sectors and major bourses traded in positive territory. Tech stocks fell 0.4%.
The European blue-chip index closed Thursday’s session in mixed territory, with European shares driven throughout the week mainly by key data points from the US and a deluge of corporate earnings reports.
Investors in Europe are digesting a series of economic data releases on Friday, including the UK’s second-quarter preliminary GDP reading, July inflation figures from France, Spain and Italy and euro zone industrial production for June.
– Elliot Smith
Tech investor names ‘must own’ FAANG stocks to buy bottoms – and avoid
Tech stocks on the Nasdaq fell slightly on Thursday, but recently staged a comeback.
The Nasdaq is up about 20% from its June lows, while Apple and Netflix are up about 30% and 50%, respectively, from their lows that month.
Top investor Paul Meeks revealed his call for two FAANG stocks on CNBC Pro Talks — one to buy the bottom if it falls a little lower, as well as one to stop. CNBC Pro subscribers can read more here.
– Weizhen Tan
The major averages are on track for a weekly gain
All major averages are headed for a higher close from Thursday’s close.
On Thursday, the Dow rose 1.63% for the week, while the S&P 500 and Nasdaq Composite gained 1.5% and 0.97%, respectively.
For the S&P 500, it will be the first 4-week winning streak since November 2021.
All S&P 500 sectors also remain in positive territory, led by energy, which is up more than 6%. Financials and materials have gained more than 3% since the start of the week.
– Samantha Subin
Stock futures open slightly higher
Stock futures opened slightly higher on Thursday. Dow Jones futures were up 0.13%, or 43 points, while S&P 500 and Nasdaq 100 futures were up 0.14% each.
– Samantha Subin
Illumina, Olo shares plunge
Shares of Illumina and Olo tumbled in the hours after both companies shared disappointing guidance.
Shares of Illumina fell more than 18% after the healthcare company missed estimates on the top and bottom lines and cut its full-year forecast. Shares of Olo fell 27% after the restaurant tech company shared weak guidance for the full year and current quarter.
– Samantha Subin
Rivian shares fell about 3%
Shares of the electric car maker fell nearly 3% in the latest quarter despite beating revenue estimates.
Rivian posted a smaller-than-expected loss and reiterated its full-year delivery guidance, but cut its forecast for the year and said investors should brace for a bigger loss and lower capital spending.
As investors digested the report, Rivian shares were seen between modest gains and losses in after-hours trading.
– Samantha Subin
