Stocks Lack Direction With Earnings Releases In Final Phase and Ahead of Retail Sales Data

Barry Adams
14 Aug, 2023
New York City

Stocks on Wall Street traded flat as investors debated rate path and global economic health. 

Popular averages hovered near flatline and Treasury yields inched slightly higher as investors reviewed last week's market performance and awaited corporate earnings. 

Consumer price and wholesale price inflation indexes showed  acceleration but stayed near the lows over the last one year. But the overall and core inflation are still significantly ahead of the Fed's 2% target level despite eleven rate hikes over the last fifteen months. 

Moreover, labor market conditions remain tight but wage prices are rising at moderate rates. 

The recent hike in crude oil prices and elevated home prices are sending alerts to policymakers that the overall inflation may be on the rise again in the months ahead.  

This week on the earnings front, Walmart, Target, Home Depot and Cisco are among 300 companies scheduled to release earnings. 

On the economic calendar, investors are awaiting July retail sales data and building permits, starts and completions data.  

 

Russian Ruble Extended Losses

The Russian ruble plunged to 101.0 against the U.S. dollar, and extended this year's decline to 38% on the growing list of negative factors. 

Rising government deficit, mismatch of imports and exports receipts and the expectations of weakening demand for energy from China and India contributed to the negative sentiment for the ruble. 

Russia's current account surplus plunged 85% in the period between January and July from a year ago, denting the sentiment further. 

 

Yen Crosses 145 and China Property Market Woes Worsens 

In Asia, markets were under pressure after the Japanese yen traded above 145 against the U.S. dollar and China's two best-known property developers missed bond payments. 

Country Garden halted trading in at least dozen on-shore bonds and the state-controlled Sino-Ocean suspended trading in debt notes due next year after the company missed interest payments of $21 million. 

The woes of China's property market dragged commodities prices lower in London trading. 

 

U.S. Indexes & Yields 

The S&P 500 index traded up 0.1% to 4,469.17 and the Nasdaq Composite rose 0.2% to 13,666.52. 

The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.19% and 30-year Treasury bonds edged down to 4.29%. 

Crude oil increased $0.45 to $82.73 a barrel and natural gas prices increased 1 cent to $2.77 a thermal unit. 

 

U.S. Stock Movers 

U.S. Steel Corporation surged 26.9% to $28.76 after the steelmaker rejected a buyout offer of $7.3 billion from Cleveland-Cliffs over the weekend.  

Cleveland-Cliffs increased 2.5% to $14.99 after U.S. Steel said it is reviewing its strategic options. 

Tesla Inc decreased 2.3% to #237.10 after the electric vehicle maker announced additional savings in China to support faltering sales amid weaker-than-expected economic rebound.  

Nikola Corp declined 11.3% to $1.73 after the company recalled 209 electric trucks 

PayPal Inc increased 1.7% to $62.52 after the payment processing company's board appointed Intuit executive Alex Chriss as the new chief executive replacing long-time chief executive Dan Schulman in September. 

Schulman plans to remain as a director till the end of May 2024.