Here are the key news highlights that investors should be aware of as they kick start their trading day:
1. Market Outlook
On Wednesday, it seems like stock prices may go down again after a not-so-good day on Tuesday. The Dow Jones Industrial Average dropped nearly 200 points, which is about 0.6%, while the S&P 500 and Nasdaq Composite went down by 0.4% and nearly 0.1% respectively.
Today, we’re expecting to hear more about the U.S. trade deficit and the services industry. There’s also a new economic report coming out called the “beige book.” Plus, some companies like GameStop, American Eagle Outfitters, and ChargePoint will announce their earnings after the stock market closes. So, keep an eye on the market for updates.
2. Disney’s Leadership Shuffle
Ever wonder what happens when a company’s top leadership plan goes wrong? Look at Disney, for instance. Bob Iger initially stepped down as CEO but then took back the position at Disney after a messy transition. He handpicked Bob Chapek as his successor, but then things got complicated.
There were disputes about company strategy, office space, and even arguments on company planes between the two “Bobs.” Now, there’s speculation about whether Iger learned from this experience. Some say he wants to retire by the end of 2026 without any more hiccups in choosing a successor. However, we’re not sure how exactly this transition will play out, as Disney is expected to pick a new CEO around early 2025.
3. Oil Production Cuts
Saudi Arabia has decided to keep cutting its crude oil production by 1 million barrels per day until the end of this year. They’ll review this decision every month. These cuts are voluntary, meaning they’re not required by OPEC+, the group that sets oil production limits.
Interestingly, Saudi Arabia’s cuts are in addition to what some other OPEC members are already doing – reducing their oil output by 1.66 million barrels per day until the end of 2024. Russia also plans to cut its oil exports by 300,000 barrels per day until December 2023. These moves have pushed oil prices to their highest point in 10 months.
4. Meta’s Return to the Office
Meta, (formerly Facebook) is now asking its employees to come back to the office three days a week. This change was announced earlier in June and doesn’t affect employees who already work remotely full-time. Last year, Meta allowed all full-time employees to work remotely but has since changed its stance. Other big tech companies like Amazon and Google‘s parent company, Alphabet, are also calling their employees back to the physical office.
5. Fed’s Thoughts on the Economy
A Federal Reserve Governor, Christopher Waller, has mentioned that some recent positive economic news gives the central bank room to be cautious about raising interest rates to control inflation. He pointed out that last week brought good news, like better job growth and lower-than-expected wage increases.
In July, the Fed’s preferred inflation measure only went up by 0.2%, and job openings in the job market dropped to their lowest level since March 2021. Waller, who has favored raising interest rates in the past, is now waiting to see if low inflation is a lasting trend or just a temporary blip.
Summary
Investors should brace for potential market declines following Tuesday’s setbacks. Key data on the U.S. trade deficit and the “beige book” will shape market sentiment. Disney’s leadership turmoil remains a source of uncertainty. Saudi Arabia’s extension of voluntary crude oil production cuts impacts oil prices.
While Meta and other tech giants shift to a hybrid work model. Federal Reserve Governor Christopher Waller cites positive economic indicators, allowing cautious interest rate adjustments. Stay tuned for market updates and ongoing developments.
