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Import prices fell more than expected in July
There was more good inflation news Friday as import prices dropped more than expected in July, according to a report from the Bureau of Labor Statistics.
Prices for goods brought into the U.S. fell 1.4%, the first monthly decline since December and more than the 1% exected drop in the Dow Jones estimate.
As with inflation data earlier in the week, the biggest share of the decline came from fuel prices, which were down 7.5% for the month. Over the past 12 months, fuel and lubricant import prices have soared 56.6%, so the monthly decline marked a big switch.
However, even nonfuel prices dropped, decreasing 0.6% for the month.
Export prices also pulled back sharply, down 3.3% in July on the back of a 3% decrease in agricultural products.
The data backs up reports earlier this week that showed easing in increases for both consumer and producer prices.
—Jeff Cox
Consumer sentiment survey out this morning, with all eyes on inflation outlook
The University of Michigan consumer sentiment survey for August will be out at 10 a.m., and investors will be watching the inflation component with particular interest.
Economists surveyed by Dow Jones expect the survey to register a 52.5 reading, a slight improvement from July’s 51.1 and just off the historic low 50 hit in June.
That June reading turned out to be especially significant not just for the top-line measure but also because it showed a tick higher in inflation expectations. Respondents put their one-year outlook at 5.3% but raised the five-year forecast 0.3 percentage point to 3.3% (later revised to 3.1%).
The combination of record-low sentiment and heightened inflation fears prompted the Federal Reserve to signal an 11th-hour switch from a telegraphed 0.5 percentage point interest rate hike to a 0.75 percentage point move.
July’s survey saw a decline in the 5-year outlook to 2.9%, but the Fed raised another three-quarters of a point anyway. Consumer sentiment surveys are often tied closely to gas prices, which fell sharply over the past month or so.
—Jeff Cox
Where the rally stands
Nearly two months removed from June lows, the three major averages have made big strides but still remain well below their record highs.
Here’s where each stands entering Friday:
The Dow is:
- 9.8% off its record high
- 11.5% off its June low
The S&P 500 is:
- 12.7% off its record high
- 14.7% off its June low
The Nasdaq Composite is:
- 21.17% off its record high
- 20.0% off its June low
— Jesse Pound
House set to vote on climate, healthcare and tax package
The House will vote Friday on the “Inflation Reduction Act,” a sweeping piece of legislation that earmarks hundreds of billions of dollars for energy and healthcare. It also includes some tax reform measures, including around corporate taxes.
The bill, which the Senate passed Sunday, outlines $369 billion for energy security and fighting climate change, making it the largest climate package in U.S. history.
The package seeks to accelerate renewable energy development in the U.S. while also incentivizing domestic supply chains.
The bill follows months of discussions between lawmakers, after Senator Joe Manchin voted against the Build Back Better bill.
— Pippa Stevens
Apple shares higher in premarket
Apple shares were in the green following a report from Bloomberg News that the iPhone maker still expected to produce about the same number of smartphones this year as last year. It’s also telling suppliers to make about the same amount of the latest generation iPhones this year as in 2021, according to the report.
If true it would counter concerns about a global economic slowdown impacting iPhone demand. Apple shares are down just 5% this year following a 30% rally of its June low. The shares were last up about 0.2% in premarket trading.
-John Melloy
U.K. economy contracts in the second quarter as cost-of-living crisis bites
European markets cautiously higher as investors track data, monetary policy path
European markets were slightly higher on Friday, with investors charting the course for monetary policy and economic growth.
The pan-European Stoxx 600 nudged 0.4% higher in early trade, with travel and leisure stocks climbing 2.7% as most sectors and major bourses traded in positive territory. Tech stocks slid 0.4%.
The European blue chip index closed Thursday’s session in mixed territory, with European stocks having been guided throughout the week mostly by key data points out of the U.S. and a deluge of corporate earnings reports.
Investors in Europe are digesting a slew of economic data releases on Friday, including a preliminary U.K. second-quarter GDP reading, July inflation prints out of France, Spain and Italy, and euro zone industrial production for June.
– Elliot Smith
Tech investor names a ‘must own’ FAANG stock to buy the dip — and one to avoid
Tech stocks have staged something of a comeback recently, even if the tech-heavy Nasdaq dipped slightly Thursday.
The Nasdaq has rallied about 20% from its June low, while Apple and Netflix have soared around 30% and 50%, respectively, from their lows that same month.
Top investor Paul Meeks revealed his call on two FAANG stocks on CNBC Pro Talks — one, to buy the dip if it drops a bit further, as well as one to hold off on. CNBC Pro subscribers can read more here.
— Weizhen Tan
Major averages are on track for a week of gains
All the major averages are on course to close out the week higher as of Thursday’s close.
The Dow ended Thursday up 1.63% for the week, while the S&P 500 and Nasdaq Composite are up 1.5% and 0.97%, respectively.
For the S&P 500 it will be its first 4-week winning streak since November 2021.
All S&P 500 sectors also remain in positive territory, led by energy which is up more than 6%. Financials and materials have both gained more than 3% since the week began.
— Samantha Subin
Stock futures open slightly higher
Stock futures opened slightly higher on Thursday. Futures tied to the Dow Jones gained 0.13%, or 43 points, while S&P 500 and Nasdaq 100 futures rose 0.14% each.
— Samantha Subin
Illumina, Olo shares sink
Shares of Illumina and Olo cratered after hours after both companies shared disappointing guidance.
Illumina’s stock sank more than 18% after the healthcare company missed estimates on the top and bottom lines and cut its outlook for the full year. Olo shares slumped 27% as the restaurant tech company shares weak guidance for the full year and the current quarter.
— Samantha Subin
Rivian shares slip nearly 3%
The electric vehicle maker’s stock fell nearly 3% despite topping revenue estimates in the recent quarter.
Rivian posted a smaller-than-expected loss and reiterated its full-year delivery guidance but cut its forecast for the year, noting that investors should prepare for a bigger loss and lower capital expenditures ahead.
Shares of Rivian seesawed between slight gains and losses in after-hours trading as investors digested the report.
— Samantha Subin
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