The Wednesday Market Minute
- Global stocks retreat following a weak set of economic data from China and the prospect of higher corporate taxes in the U.S.
- China’ August retail sales, as well as its factory output, slowed notably in August as COVID restrictions held back activity.
- Macau’s crackdown on gaming added to market unease as casino stocks shed $14 billion in value in Hong Kong trading.
- Benchmark 30-year bond yields fall to an August 5 low of 1.827% as inflation concerns ease.
- Oil scales fresh multi-week highs as the dollar retreats and API data shows a 5.3 million decline in domestic crude stocks.
- U.S. equity futures suggest a mixed open on Wall Street ahead of import price data at 8:30 am Eastern time.
U.S. equity futures were mixed in cautious trading Wednesday, while Treasury bond yields and the dollar slipped lower against its global peers, as slowing domestic inflation, and weaker growth in China, added to market uncertainty.
A closely-tracked set of data from China, the world’s second-largest economy, showed both a slump in retail sales and cooling factory activity last month in what could be an ominous sign for the region as COVID cases accelerate in the southeastern province of Fujian ahead of next month’s week-long national holiday.
China’s latest corporate sector crackdown, this time taking aim at the $36 billion a year gaming business in the special protectorate of Macau, only added to market’s unease.
In the U.S., the prospect of higher corporate taxes in House Democrats’ $3.5 trillion budget bill are adding to investor concerns regarding growth and inflation, although the latter was dispelled by a slower-than-expected reading for August CPI yesterday that could provide the Federal Reserve with a bit more time to consider it next policy move.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 25 point opening bell decline while those linked to the S&P 500 are priced for a 2 point boost. Nasdaq Composite futures are set for a 20 point gain as benchmark 10-year note yields fall to 1.27% following yesterday’s inflation easing.
Microsoft (MSFT) – Get Microsoft Corporation (MSFT) Report shares were a a notable pre-market mover, rising 1.3% to $303.65 each after the world’s second-largest tech company unveiled plans to boost its quarterly dividend and buyback additional shares.
Apple (AAPL) – Get Apple Inc. (AAPL) Report was on the rise, as well, as traders attempted to claw back some of yesterday’s 1% decline that followed a lukewarm reception from analysts and tech watchers for its newly unveiled iPhone 13.
Apple shares were marked 0.3% higher in pre-market trading Tuesday to indicate an opening bell price of $148.59 each.
Away from tech, the biggest pre-market movers were in the gaming space, as shares of U.S. casinos with operations in Macau tumbled after set out to make major changes to licensing rules in the world’s biggest gaming up.
Las Vegas Sands (LVS) – Get Las Vegas Sands Corp. (LVS) Report shares were marked 7.5% lower in pre-market trading Wednesday to indicate an opening bell price of $35.81 each. Wynn Resorts (WYNN) – Get Wynn Resorts, Limited (WYNN) Report meanwhile, tumbled 6.4% to $86.36 each in pre-market dealing and MGM Resorts International (MGM) – Get MGM Resorts International (MGM) Report fell 2.6%.
Oil prices were moving higher, however, as a weaker U.S. dollar, the impact of Hurricane Nicholas and American Petroleum Institute data showing a 5.3 million decline in domestic crude stocks.
WTI crude futures for October delivery were marked 93 cents higher at a fresh six-week high of $71.39 per barrel while Brent contracts for November, the global benchmark, added 87 cents to $74.47 per barrel.
In overseas markets, weak China data and the fastest August inflation print from Britain in nine years, where CPI rose 3.2% from last year, pulled the European Stoxx 600 0.4% lower by mid-day trading, while the Asia region benchmark, the MSCI ex-Japan index, fell 0.7%.