©Reuters
By Peter Nurse
Investing.com — US stocks will open higher on weaker-than-expected consumer inflation report, helped by Disney’s subscriber growth. Fresh producer prices and jobless claims data are set to be released, while IEA data points to tightening supply conditions in the crude oil market. Here’s what you need to know about the financial markets on Thursday, August 11th.
1. Excessive inflation optimism?
Risk sentiment rose on Thursday, bolstered by cooler-than-expected Wednesday readings, which investors interpreted as easing pressure on the US Federal Reserve to aggressively tighten monetary policy.
Investors are now pricing in a September Fed rate hike after previously expecting a 75 basis point hike.
However, you may well be hasty.
Fed policymakers were quick to speak out after the release, trying to water down that optimism.
The Fed is “far, far from declaring victory over inflation,” Minneapolis Federal Reserve Bank President Neel Kashkari said, while San Francisco Federal Reserve Bank President Mary Daly also warned that it far too early to “declare victory” while Chicago Fed President Charles Evans declared inflation was still “unacceptably” high.
After all, it was flat month-on-month in July after rising 1.3% in June, still up 8.5% yoy. And that’s still unacceptable.
2. Disney takes the lead in the streaming game
Walt Disney (NYSE:) has taken the lead in global streaming competition, overtaking Netflix (NASDAQ:) with a total streaming subscribers of 221 million as part of its third quarter reported after the close on Wednesday.
Disney began building a streaming service to compete with Netflix in 2017, recognizing that audiences were migrating from traditional cable and broadcast television to online television.
The entertainment giant said total Disney+ subscriptions grew to 152.1 million in the quarter. When combined with Hulu’s 46.2 million subscribers and ESPN+’s 22.8 million, that total of over 221 million surpasses longtime market leader Netflix’s 220 million subscribers.
That popularity has given Disney license to schedule price increases for customers who want to watch Disney+ or Hulu ad-free, even as the public grapples with rising inflation.
However, the company on Wednesday also lowered its long-term subscriber forecast for Disney+ customers to between 215 million and 245 million by the end of September 2024, blaming the loss of cricket rights in India. That’s down from the 230 million to 260 million that Disney had forecast.
3. Stocks are likely to rise; Disney rises
US stock markets are expected to open marginally higher on Thursday, continuing the previous session’s strong gains on the weaker than expected inflation report.
As of 06:00 ET (10:00 GMT), they were up 105 points, or 0.3%, up 0.3% and up 0.2%.
Major Wall Street indices all ended with strong gains on Wednesday, with the blue-chip up over 500 points, or 1.6%, the broad-based index up 2.1% and the tech-heavy index up 2.9% increased and closed at the highest level since late April .
Strong results on Thursday helped after Disney’s tight Wednesday [see above]with shares of the entertainment giant up over 7% premarket.
The earnings season resumes on Thursday, with reports from the likes of Rivian Automotive (NASDAQ:), Warby Parker (NYSE:) and Poshmark (NASDAQ:) planned.
Other companies in the spotlight include Sonos (NASDAQ:) and bumblebee (NASDAQ:), with both stocks sharply lower premarket after lowering their full-year guidance.
4. PPI, Initial Jobless Claims data due
Following the excitement of Wednesday’s CPI release [see above]investors will look to July’s US Producer Price Index release as confirmation of easing inflationary pressures.
were up more-than-expected in June, up 1.1% on the month, but are only expected to have risen 0.2% in July as exceptional energy price increases stabilized. This is still a rate of 10.4% after 11.3% in the previous month.
The PPI number is due at 08:30 ET (12:30 GMT), the same time as the release of the weekly number.
The number of Americans filing new jobless claims rose 6,000 to 260,000 last week, suggesting some weakening in the job market.
This slowdown is expected to continue, with new jobless claims rising to 263,000.
5. Oil rises; The IEA points to a decline in Russian production
Crude oil prices rose on Thursday, buoyed by renewed concerns about supply shortages following the release of a report from the International Energy Agency.
According to a market report by the Paris-based intergovernmental organization, Russia’s oil production will fall by about 20% by early next year as a European Union import ban comes into effect, locking in nearly 2 million barrels a day by early 2023.
Oil is struggling to find direction as the market is yet to reach consensus on the supply and demand outlook.
The market slipped earlier on Thursday as flow resumed through a key European pipeline from Russia along the southern Druzhba network as a payment dispute was settled.
The US rose 5.5 million barrels last week, according to Energy Information Administration data released on Wednesday. This is the second consecutive week of stronger-than-expected increases in US oil inventories, suggesting weaker demand from the world’s largest consumer.
By 6:00 a.m. ET, futures were up 1.2% to $93.00 a barrel while they were up 1% to $98.39 a barrel.
Comments are closed.