US open: Equities subdued on fresh inflation fears
US stock markets opened a tad lower on Monday as investors continued to digest last week's inflation figures and awaited the minutes from the Federal Reserve's last policy meeting due out for release later in the week.
Nasdaq 100
20,195.77
09:20 05/11/24
PAYPAL HOLDINGS-WI
$78.97
09:20 05/11/24
Tesla Motors Inc
$254.26
09:20 05/11/24
United States Steel Corp.
$39.23
09:20 05/11/24
By 1001 in New York, the Dow Jones was down 0.2% at 35,230, the S&P 500 and Nasdaq were more or less flat at 4,463 and 13,644, respectively.
A close eye will be kept on the publication of the minutes from the last Federal Open Market Committee meeting, scheduled for release on Wednesday, after inflation figures muddied the outlook for interest rates.
Mixed data last week did little to settle investors' concerns about the economy. The monthly rate of consumer price inflation picked remained steady at 0.2% in July, but producer price inflation rose more than forecast to 0.3% from a revised 0% in June – a concern for those who had hoped that a possible slowdown in price growth could prompt the Fed to pause hiking interest rates at its next meeting.
However, Goldman Sachs predicted over the weekend that the Fed is unlikely to hike rates again this year. In fact, the bank reckons that the first rate cut will take place in the second quarter of 2023.
Sentiment was also dampened by fresh concerns about the Chinese economy – in particular, the health of its property industry.
Chinese developer Country Garden on Monday announced it was suspending the trading of 11 onshore bonds after not being able to make bond payments. The news follows a warning last week from the company that it expects to lose $7.6bn in the first half of 2023.
Sector peer Sino-Ocean also revealed that it missed $21m in interest payments and had suspended trading of 6% of guaranteed notes due 2024.
US Steel soars
US Steel shares surged 24% to $28 after the company rejected a takeover offer from rival Cleveland-Cliffs for $7bn, worth $35 a share – a 43% premium to its closing price on Friday. US Steel had revealed over the weekend that it was looking at options and had received multiple unsolicited bids for the company.
PayPal shares rose after the company announced that the head of of Intuit's Small Business and Self-Employed division, Alex Chriss, would join the the payment firm as chief executive in September.
Electric carmaker Tesla declined after cutting the price of its Model Y models in China.
Looking ahead, retail heavyweights will be reporting their second-quarter earnings this week, with numbers expected from Home Depot, Target and Walmart.