Daily Markets: Apple Today, August CPI Tomorrow

Today’s Big Picture

Asia-Pacific equity markets finished the day mixed. China’s Shanghai Composite declined 0.18% Hong Kong’s Hang Seng slipped 0.39%, and South Korea’s KOSPI ended the day 0.79% lower on a broad decline led by Commercial, and Industrial Services names. India’s SENSEX gained 0.14%, Australia’s ASX All Ordinaries advanced 0.20%, Taiwan’s TAIEX rose 0.85%, and Japan’s Nikkei closed 0.95% higher led by gains in Banking & Insurance, and Power names.

European markets are mixed in midday trading and U.S. equity futures point to a lower market open later this morning. Weighing on tech stocks this morning was disappointing guidance last night from Oracle. While they digest that guidance and comments on AI, investors are gearing up for tomorrow’s August CPI report and Thursday’s interest rate decision by the European Central Bank. Before we get to those potentially market-moving events, today Apple (AAPL) will hold its annual event to introduce several new products, including its latest iPhone models and Arm Holdings (ARM) inches closer to its hot IPO offering. Names seeing pre-market action today include Oracle, about 9.50% lower, and Westrock (WRK), seeing a roughly 7.50% surge following acquisition news (more below).

Data Download

International Economy

Germany's wholesale prices fell for the fifth consecutive month by 2.7% YoY in August after posting a 2.8% YoY drop in July. Downward pressure came from petroleum products (-15.8%), scrap & residual materials (-30%), cereals, raw tobacco, seeds & animal feeds (-21.4%); chemical products (-18.2%), and metals & metal ores (-16.1%).

The ZEW Indicator of Economic Sentiment for the Euro Area decreased to -8.9 in September from -5.5 in the previous month, below market expectations of -6.2.

The unemployment rate in the United Kingdom rose to 4.3% in July, the highest level since 3Q 2021. The number of unemployed people increased by 159,000 to 1.46 million, largely driven by individuals unemployed for up to 12 months. Wages, excluding bonuses, were 7.8% YoY during the three months to July, marking the largest increase since comparable records began in 2001.

The International Energy Agency forecasts demand for coal, natural gas, and oil will likely peak before 2030. The decline in fossil fuel consumption is expected to start this decade because of the ongoing shift to renewable power and wider electric vehicle adoption.

Domestic Economy

The NFIB Business Optimism Index in the U.S. decreased to 91.30 points in August from 91.90 points in July and the 91.7 consensus.

Markets

Meta Platforms’ (META) 3.25% gain helped lift Communication Services 1.51%, but it was Tesla’s (TSLA) 10.09% surge on the heels of a Morgan Stanley (MS) research report that led the Consumer Discretionary sector higher, closing up 2.69% that provided much of yesterday’s optimism. The only sector not participating was Energy, which fell 1.31% after the past few days of gains. Broad indexes all closed higher as the Russell 2000 rose 0.19%, the Dow gained 0.25%, the S&P 500 added 0.67% and the Nasdaq Composite was up 1.14%. After shares of JM Smucker’s (SJM) initially surged on news of its acquisition of Hostess Brands (TWNK), traders started to sour on the idea after analysts at Standard and Poor’s Global Ratings issued a negative outlook on the debt-heavy deal sending shares 7.01% lower.

Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 4.57%
• S&P 500: 16.88%
• Nasdaq Composite: 32.98%
• Russell 2000: 5.33%
• Bitcoin (BTC-USD): 51.33%
• Ether (ETH-USD): 29.26%

Stocks to Watch

Before U.S. equity markets begin trading today, Cognyte Software (CGNT) will report its quarterly results.

At 1 PM ET, Apple will hold its Wanderlust event during which it is expected to unveil its latest iPhone and Apple Watch models as well as updated AirPods products. Read what to expect from Apple's iPhone launch here.

Oracle's (ORCL) August quarter EPS came in better than expected despite revenue for the quarter rising 8.8% YoY to $12.45 billion, modestly missing the $12.48 billion consensus. The company’s quarterly cloud revenue came in at $4.6 billion, up 29% YoY in constant currency and significantly below the 55% YoY growth in the prior quarter. Oracle co-founder and chief technology officer Larry Ellison shared “AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen2 Cloud. That's twice as much as we had booked at the end of Q4.” For the current quarter, Oracle guided its EPS to $1.30-$1.34 vs. the $1.34 consensus with revenue growth +5%-7% or $12.89-$13.13 billion vs. the $13.28 billion consensus.

July quarter results posted by Mission Produce (AVO) were mixed, with EPS missing the consensus forecast while revenue that fell 16.5% YoY to $261.4 million beat the $241.97 million consensus. For the current quarter, the company sees avocado industry volumes flat to slightly lower vs. year-ago levels due to reduced supply from Peru, which will impact Mission’s production volumes. Pricing is expected to be flat to slightly higher on a sequential basis, and higher on a year-over-year basis by approximately 10%.

Sight Sciences (SGHT) cut its revenue outlook citing uncertainty over the future of Medicare coverage for its products as a factor weighing on demand.

WestRock (WRK) agreed to merge with Smurfit Kappa (SMFTF) to form one of the world's top paper and packaging companies, valued at almost $20 billion. Per the merger terms, WestRock shareholders will receive one new Smurfit WestRock share and $5.00 in cash, for a total value of $43.51 per share, with Smurfit Kappa shareholders holding 50.4% of the combined company.

Acelyrin (SLRN) shares were under pressure after the company shared its lead product candidate failed to meet the primary endpoint of a clinical trial in patients with the severe skin illness Hidradenitis Suppurativa.

IPOs

Reports indicate the IPO order book for ARM Holdings (ARM) was closed a day early, suggesting strong demand for the shares.

Readers looking to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

There are no companies slated to report quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Wednesday, September 13

• Japan: Producer Price Index – August
• UK: GDP, Industrial and Manufacturing Production – July
• Eurozone: Industrial Production - July
• US: Weekly MBA Mortgage Applications
• US: Consumer Price Index – August
• US: Weekly EIA Crude Oil Inventories
• US: Treasury Budget – August

Thursday, September 14

• US: Weekly Initial & Continuing Jobless Claims
• US: Producer Price Index – August
• US: Retail Sales – August
• US: Business Inventories – July
• US: Weekly EIA Natural Gas Inventories

Friday, September 15

• China: Industrial Production, Unemployment Rate, Retail Sales – August
• Eurozone: Labor Cost Index, Wage Growth – 2Q 2023
• US: Import/Export Prices – August
• US: Empire Manufacturing Index – September
• US: Industrial Production & Capacity Utilization – August
• US: University of Michigan Consumer Sentiment Index (Preliminary) – September

Thought for the Day

“The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty." — Winston Churchill

Disclosures

• Apple (AAPL) is a constituent of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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