The following news items are the most crucial for investors to know as they begin their trading day:
Stocks sputter along
Following a mixed day on Tuesday, U.S. equity markets were expected to open virtually flat on Wednesday. After a solid July, stocks had some momentum going into August, but as the summer progressed, things significantly slowed down. The S&P 500 has been roughly steady so far this month after rising 9% in July. According to one expert, the markets are engaged in a “tug of war” over the state of the economy and potential Fed actions. As long as inflation stays strong, the central bank is anticipated to raise rates once again in September. Markets are currently in the height of earnings season. Wednesday after the bell, Salesforce and Nvidia are scheduled to report, while Peloton, Gap, Dollar General, and Dollar Tree are scheduled for Thursday.
Amazon seller having issues
The largest Amazon seller is getting ready to liquidate, according to Annie Palmer of CNBC. Pharmapacks, an online retailer of health and beauty items, topped Amazon’s U.S. seller list about a year ago. Packable, its parent firm, was also preparing to go public through a SPAC. Following its failure to obtain a lifeline from financiers, Packable is now terminating its workforce. The business prospered in the early stages of the epidemic, but recent supply chain problems caused it to have some items out of stock, which slowed down revenue growth.
What Macy’s and Nordstrom are telling us
While higher-end retailers Nordstrom and Macy’s are reducing their expectations as they deal with weaker demand and their own inventory problems, Walmart and Target maintain their predictions while aggressively marking down mountains of unsold merchandise. The updates support the idea that consumers are spending more on necessities like groceries, which favors Walmart, the biggest retailer and the country’s largest supermarket. On Wednesday, Nordstrom and Macy’s both posted solid quarterly earnings, but they also issued a warning that their customers were delaying purchases of discretionary goods, particularly clothing. “We are adjusting our plans and taking action to navigate this dynamic in the short term, including aligning inventory and expenses to recent trends,” on Tuesday, the CEO of Nordstrom said.
Optimism in the mortgage industry
Overall, the demand for mortgages is still low, but a surprising segment of the market displayed indications of recovery. Last week, there was an increase of 4% in requests for government-backed loans with smaller down payments. According to Joel Kan, an economist for the Mortgage Bankers Association, that might be “possibly an indicator of increased first-time homebuyer activity.” Long-term limited housing supply, especially at the lower end of the market. However, demand from homebuyers with higher incomes has somewhat decreased, and the average loan size has shrunk.
Decision on student loan debt
President Joe Biden is rumored to be deciding shortly—possibly as soon as this Wednesday—on whether to waive student loans. According to various sources cited by NBC News, Biden would likely prolong the moratorium on student loan payments while waiving up to $10,000 in interest for borrowers with annual earnings under $125,000. Advocates for reducing student debt, which in the US amounts to more than $1.7 trillion, are unlikely to be satisfied with that. Republicans and some folks who don’t have any outstanding school debt will likewise be offended by it. Polls consistently show support for student debt forgiveness, but a recent CNBC study found that over 60% of participants believe that doing so would increase inflation, which is already high.