JJ Kinahan is Senior Vice President, Head of Retail Expansion and Alternative Investment Products at Cboe Global Markets, Inc. (Cboe).
Key Takeaways:
- Markets dawdle as investors wait for Fed rate decision
- SK Hynix and Intel shares rise after potential deal report
- J.B. Hunts’ share tumble after earnings warning
There are some days when investors have to take what the market gives and this looks like one of them. It is a waiting game until the Federal Reserve shares its decision on the direction of interest rates and the press conference this afternoon.
The market is likely to be quiet until then. The markets are moving moderately higher in early trading while crude oil prices are slipping, as are Treasury yields. The Dow Jones Industrial Average and the S&P 500 Index are edging off the flat line while the Nasdaq Composite is a little higher, up 0.43%.
As we’ve said before, the markets like certainty and the CME FedWatch tool’s 92.7% level signals assurance, but ultimately the Federal Open Market Committee (FOMC) makes the decision. If the FOMC needed any extra push, the U.S. retail sales report out earlier might be it. Retail sales came in strong, up 1.2% compared with a 0.8% expectation, underscoring that consumers are still spending despite higher prices at the pump and almost everywhere else.
Speaking of the pump, WTI Crude Oil prices are down 1.7% to the low-$104-a-barrel range. The 10-year yield also slipped a bit to 4.97%, off its intraday high of 5.04% Tuesday.
Elsewhere, shares of J.B. Hunt are off deeper than 10% after the trucking firm warned investors that higher prices are eating into earnings and to expect them to fall from 5% to 10% in the third quarter. Escalating costs for gas and diesel as well as bond yields are cutting into profitability.
Shares of SK Hynix and Intel are both rising better than 3% in early trading after Reuters reported the two were in talks to team up to make memory SK Hynix chips in the U.S. for the first time. According to the report – which SK Hynix tweaked – the South Korean giant would use Intel’s manufacturing plant to make memory chips. SK Hynix said it was exploring a handful of options.
Cryptocurrency stocks are mostly edging higher after the Senate Tuesday narrowly rejected the Digital Asset Market Clarity Act. Dubbed the Clarity Act, the bill aimed at putting a regulatory framework around the digital currency industry. Shares of MicroStrategy, Coinbase and Robinhood are all flat or up moderately. Circle shares are falling 1%.
Lennar is slated to open its books after the bell and what its executives say about the housing industry and the overall economy on the conference call could be telling. If interest rates go up, it will impact mortgage rates and could be a harbinger of what’s to come in the housing industry. Stay tuned. Lennar shares are up 0.66%.
Happy Trading!
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