Wall Street Remains Rangebound

Pre-market futures are bobbing and weaving on either side of the zero-line this morning, with a dearth of market direction from earnings reports or economic data, save a new International Trade Balance for July out this morning. In fact, we won’t gain any real traction from scheduled news items until the new Consumer Price Index (CPI) comes out next week, and Q3 earnings season doesn’t begin until early reporters like FedEx FDX release their numbers September 22 — a day after the Fed decides the new interest rate.

The trade balance (deficit) came down to a nine-month low for July: -$70.7 billion, from the -$80.9 billion for June. We’re also well off the all-time crevasse in trade, which came in March of this year: -$107.65 billion. Exports rose +0.2% to $259.3 billion, while Imports dropped -2.9% or $329.9 billion. Our deficit with China fell -$3.9 billion to $33.0 billion.

Speaking of China, the central government there is issuing another shutdown due to the outbreak of the Covid virus. Lending is currently so slow in the country that the People’s Republic is cutting its bank rate -200 basis points (bps), as other countries around the world are busy hiking theirs. Here in the U.S., with another +75 bps hike possible just a couple weeks away, we’re currently seeing a 20-year high in the U.S. dollar — quite the opposite direction China’s yuan finds itself today.

Futures at this hour are mixed, with the Nasdaq +8 points — trying to break a seven-day losing streak, its longest since 2019 — and the Dow and S&P 500 -30 and -2 points, respectively. The 10-year bond is now trading at its highest level since June of 2016, back when Barack Obama was still president.

Later today, we’ll see the new unveiling of the Apple AAPL iPhone 14 at the company’s Far Out event. Analyst expect a couple tweaks to past models for the new version, as well as a pricier Pro phone, but not much in the way of major innovation. The Apple Watch Series 8 is likely also to come out with a larger screen. The smartphone industry has not been strong, aside from sales of the iPhone. That said, with inflation being rolled back across industries to curb inflation, can Apple really expect to stay aggressive in pricing their products? We’ll have to see.

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