Last Night's Market Recap
S&P 500 - Heatmap
Overnight – Tech grinds higher despite another underwhelming Apple launch
Tech stocks ground higher overnight, supporting the index and helping offset weakness in energy and financials a day ahead of an important inflation report.
Tech added to recent gains to help the broader market recovery, but Apple closed below the flatline after the European Court of Justice ruled on Tuesday that Apple must repay 13 billion euros in back taxes. The ruling overturned an earlier decision that had found in favour of the company. The news comes a day after the Cupertino-based group unveiled its iPhone 16 on Monday, which is due to go on sale on Sept. 20 with pre-orders available this Friday, to help reinvigorate flagging sales of the device. Analysts said the new iPhones and AI features largely met expectations set by Apple’s earlier reveal of its plans for a push into AI, called “Apple Intelligence.”
Wall Street banks including Goldman Sachs and JPMorgan led the broader financials sector lower after signalling a cautious outlook. JPMorgan Chase President Daniel Pinto said analysts forecasts for next year’s net interest income were too optimistic, sending the stock down 7%. Goldman Sachs chief David Solomon on Monday warned that the bank’s Q3 trading revenue could fall 10% compared to same period a year earlier.
Energy stocks, down 2%, led the broader-market decline, pressured by a more than 4% slump in oil prices amid rising oversupply concerns as the demand outlook turns gloomy. OPEC said now now expects demand to increase by roughly 2 million barrels per day this year, down from its prior projection of 2.1 million in August. It was the second consecutive month that the producer group has made a downward adjustment to the forecast.
As well as the weaker fundamentals, adverse weather also weighed after a slew of oil companies, including Exxon Mobil, Shell and Chevron, said they are moving to halt production and refining activities in the Gulf of Mexico due to Tropical Storm Francine. The storm is expected to strengthen in the coming days, according to the National Hurricane Center.
Vice President Kamala Harris and former President Donald Trump are set for their first presidential debate Tuesday. Recent polling data suggest Harris and Trump are in a neck and neck race for the White House.
Bonds
Commodities & FX
The Day Ahead
ASX SPI 8008 (+0.10%)
The local market is unlikely to make any major moves today as RBA Dep Gov Hunter speaks just after the open and US inflation data looms. While the US inflation data is increasingly taking a back seat as a catalyst for global markets, a high reading could put the highly anticipated rate cuts expected this month in doubt
Some positive export data out of China yesterday afternoon may momentarily put a floor in the commodities stocks, however the damage done by the selling from fear fueled investors will take at least a month to settle as the financial press in Australia hammers the “China weakness” theme
