Stock futures edge higher, dollar extends gains; Apple shares bump ahead of ‘Far Out’ launch event; GameStop earnings in focus as meme stocks face reckoning; Elon musk seeks Twitter trial delay to study whistleblower claims and Hurricane Earl awakens sleepy Atlantic storm season.
Here are five things you must know for Wednesday, September 7:
1. — Stock Futures Edge Higher, Dollar Extends Gains
Wall Street futures edged modestly higher Wednesday, while the dollar continued to push through multi-decade highs against its global peers, as weakening growth prospects in Europe and China push global investors deeper into U.S. assets.
Trade data overnight from China, the world’s biggest exporter, showed a marked slowdown from August as Beijing’s Covid lockdowns hammered manufacturing and services activity up and down the country.
Exports were only 9.4% higher than last year, official data indicated, narrowing China’s trade surplus to a much smaller-than-expected $79.4 billion.
The data, which included slump in crude imports, extended declines for global crude prices in overnight trading and added further momentum to the surging U.S. dollar.
The dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher on the session at 110.299 and within a whisker of the 20-year high it reached in overnight dealing.
WTI crude prices, meanwhile, fell to a seven-month low and were last seen trading at $86.48 per barrel ahead of Energy Department data on domestic stockpiles later in the session. The downside moves continue to add much-needed pressure for U.S. gas prices, which the AAA motor club pegged at a national average of $3.764 per gallon.
Elevated rate bets heading into the Federal Reserve’s September 21 policy meeting are holding stocks back, however, as rising bond yields pushed the Nasdaq into its seventh consecutive daily decline last night, the longest losing streak since 2016.
The CME Group’s FedWatch pegs the chances of a 75 basis point rate hike, the third in a row, at around 70%, a move that has lifted benchmark 2-year Treasury note yields well past 3.5% as last week’s solid jobs report, and a better-than-expected reading for service sector activity over the month of August, suggest a meaningful recovery is underway for the world’s biggest economy.
On Wall Street, futures contracts tied to the S&P 500 are indicating a modest 8 point opening bell gain while those linked to the Dow Jones Industrial Average are priced for a 55 point bump. Futures linked to the tech-focused Nasdaq are indicating a 35 point gain.
In overseas markets, Europe’s Stoxx 600 benchmark fell 0.58% in early Frankfurt trading, while China trade data pulled the region-wide MSCI ex-Japan index 1.18% lower on the session, pegging the regional benchmark at the lowest levels in seven months.
2. — Apple Shares Bump Ahead of ‘Far Out’ Launch Event
Apple’s (AAPL) – Get Apple Inc. Report shares bumped higher in pre-market trading ahead of the tech giant’s hotly-anticipated product launch event later today at its corporate headquarters in California.
The event, cryptically dubbed ‘Far Out’ by Apple’s marketing team, is scheduled for 10:00 am Pacific time at the Steve Jobs Theater in Cupertino and is likely to include new versions of both its flagship iPhone and Apple Watch, alongside previously-announced operating system upgrades and the expansion of its homemade A15 chip.
Analysts expect Apple to unveil a 14th version of the iPhone, with upgraded camera capabilities, more storage and, in a nod to the ‘Far Out’ branding, satellite network connectivity. A new Apple Watch, Air Pods and potentially even the first series of virtual reality headsets could also be part of the traditional pre-holiday product launch.
Apple shares were marked 0.38% higher in pre-market trading to in indicate an opening bell price of $155.12 each.
3. — GameStop Earnings In Focus As Meme Stocks Face Reckoning
GameStop (GME) – Get GameStop Corporation Report shares edged higher in pre-market trading ahead of the video game retailer’s, and meme-stock favorite’s, second quarter earnings after the closing bell.
Analysts expect GameStop to post its sixth consecutive quarterly loss for the three months ending in July, with a bottom line loss of 38 cents per share. Group revenues, however, are expected to rise 7.3% from last year to $1.266 billion.
GameStop, which is hoping to transition from a reliance on brick-and-mortar sales to a larger and more dynamic presence online, has reportedly slashed its headcount in order to minimize the cash burn required to build-out its NFT marketplace following a tie-up earlier this year with Australian blockchain startup ImmutableX.
Short interest in GameStop has expanded into Wednesday’s earnings, however, with data from S3 Partners showing just over $1.66 billion in bets against the group, a figure that represents around 152.7 million shares, or 20.6% of the stock’s outstanding float following a four-for-one split earlier this summer.
GameStop shares were marked 0.64% higher in pre-market trading to indicate an opening bell price of $25.30 each.
4. — Elon Musk Seeks Twitter Trial Delay To Study Whistleblower Claims
Twitter (TWTR) – Get Twitter Inc. Report shares moved higher in pre-market trading after lawyers for Elon Musk urged a Delaware judge to delay the pair’s October showdown in order to allow the Tesla (TSLA) – Get Tesla Inc. Report CEO to investigate whistleblower claims.
Alex Spiro, who is representing Musk at the Delaware Chancery, asked Chancellor Kathaleen McCormick to give the billionaire “a few weeks” to look into allegations made a former Twitter security chief, Peiter Zatko, that accused the social media group of insufficient oversight and a focus on profits that allowed spam accounts to proliferate on the micro-blogging platform.
Musk has been locked in public dispute with Twitter since early July over the amount of so-called “fake” or “bot” accounts on the social media platform, which he says constitute a material change to the merger terms he agreed in the spring.
He is seeking to walk away from his $44 billion takeover deal at a trial that is set for October 17.
Twitter has counter-sued, demanding that Musk pay the promised $54.20 per share for the group, with attorney William Savitt accusing Musk of using the ‘bot account’ controversy as a pretext to exiting his promised takeover.
Twitter shares were marked 1.94% higher in pre-market trading to indicate an opening bell price of $39.40
5. — Hurricane Earl Awakens Sleepy Atlantic Storm Season
Tropical Storm Earl has accelerated into a hurricane, officials declared late Tuesday, marking only the second named hurricane of the quietest season in more than two decades.
The National Hurricane Center in Miami said Earl, which is currently moving along the Atlantic Ocean around 550 miles south of Bermuda, is carrying windspeeds of around 80 miles per hour that will strengthen over the coming days in what it deemed a ‘major hurricane’ by Thursday evening.
The Atlantic region passed the month of August without a named storm for the first time in 25 years, and no hurricane has made landfall in the United States since the season — which runs until October — began in early spring.
Another Atlantic storm, Hurricane Danielle, is carrying gusts of up to 75 miles per hour as it moves towards the Nova Scotia and Newfoundland coasts, but is expected to lose power and revert to a tropical storm by Thursday.
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