Stock futures rise as Wall Street awaits key inflation report

Stock futures rise as Wall Street awaits key inflation report
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Chinese electric vehicle maker BYD may recoup nearly 40%

BYDa Chinese maker of electric vehicles, could make big profits in the future, according to Barclays.

“BYD (Build Your Dream) became the world’s No. 1 electric vehicle manufacturer in terms of deliveries in the second quarter of 2022, dethroning Tesla from that pedestal for the first time, and its revenue growth rate is likely to triple digits continue for the rest of 2022, despite its already sizable base,” analyst Jiong Shao wrote in a note on Tuesday.

The analyst also has a price target of $40 per share, which is up 38% from Monday’s close.

CNBC Pro subscribers can Read the full story here.

—Sarah Min

UK unemployment hits 48-year low as real wages fall sharply

UK unemployment fell to 3.6% in the three months to July, its lowest level since 1974.

Meanwhile, the economic inactivity rate rose 0.4 percentage point to a five-year high of 21.7%.

The Office for National Statistics attributed the change to an increase in long-term illness designs and students leaving the labor market. The growing tightness of the labor market may fuel further inflationary pressure and cause headaches for Bank of England.

Annual growth in real wages — taking inflation into account — without bonuses fell 2.8% in the three months to the end of July.

“People understandably look to their employers for help during the cost-of-living crisis, while Andrew Bailey will hope companies don’t raise wages too quickly and exacerbate inflation,” said Marcus Brookes, chief investment officer at Quilter Investors.

“However, the UK must prepare for public sector discontent with wage strikes continuing as budgets are stretched.”

-Elliot Smith

UBS plans to increase dividend; stocks rise pre-market

UBS The group plans to increase its dividend by 10% to $0.55 per share and expects its share buybacks in 2022 to exceed $5 billion, the Swiss bank said on Tuesday.

Shares of UBS were indicated 1.2% higher in premarket activity after what ZKB analyst Michael Klien called a surprise news.

read more here.

— Reuters

European stocks rose cautiously on Tuesday morning as global markets braced for the latest US inflation reading.

the pan-european Stoxx 600 rose 0.3% in early trading, with food and beverage stocks adding 0.8% to lead gains as most sectors and major bourses inched into positive territory. Retail shares fall 0.4%.

CNBC Pro: Do ​​you want to invest in real estate? These REITs are among the favorites of analysts

Real estate investment trusts, or REITs, are returning to the spotlight after a volatile year for many asset classes.

Analysts at Morgan Stanley and Citi single out REITs in two sectors that they say could outperform the broader market and remain resilient in a downturn.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Fed actions this month could be ‘eventless’ for asset prices, says Ameriprise

The next Fed meeting in September, where the central bank is expected to raise interest rates, is likely already priced into the market, according to Ameriprise chief market strategist Anthony Saglimbene.

“In our view, the central bank’s actions this month are likely not an event for asset prices,” he wrote in a note on Monday. “However, incoming economic data in the coming weeks and months and its influence on political actions next year could play a much larger role in shaping the direction of stocks in the medium term.”.”

Markets now expect the Fed to hike rates by 0.75 percentage point, meaning assets may not move much if that is the central bank’s decision. A Tuesday report on the consumer price index that is in line with expectations may also not move the needle.”

“Unless last month’s inflation numbers turn out substantially more than expected, including Wednesday’s update to the August producer price index (PPI), we believe a 75 basis point hike from the Fed is essentially locked in.” at this point,” he said.

—Carmen Reinicke

Relief rally likely a bear market bounce, says Wells Fargo

The recent relief rally in stocks is likely another bear market bounce and investors should position themselves for more instability ahead, according to Wells Fargo.

“Year-to-date outperformance of defensive, high-paying, high-quality, low-value stocks reminds investors of the hallmark of a bear market,” wrote global portfolio and investment strategist Chao. Ma in a note from Monday.

Such rallies occur in almost every bear market and many are quickly reversed, leaving investors with regret, they added.

“Although it is difficult to predict the bottom of a bear market, in the past, market bottoms were generally preconditioned by overly bearish market sentiment and a definite sign of improvement in the underlying market or economic problem,” Ma said. We think we’re not there yet on either count.”

In the meantime, Ma advises investors to look for defensive stocks with low volatility, high dividends and share buyback yields. It also says that investors should opt for high-quality names with profitability and leading market share and an affordable market price.

—Carmen Reinicke

US stock futures rise ahead of Tuesday’s CPI report

US stock futures rose on Monday night as Wall Street looks ahead to the August consumer price index report to be released on Tuesday morning. The report will give investors an update on the inflation situation in the US and is one of the last data the Federal Reserve will see before its September meeting.

Dow Jones Industrial Average futures gained 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures rose 0.18% and 0.21%, respectively.

—Carmen Reinicke

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