Markets edge higher with Fed rate cut on the horizon

Dow went up 228, advancers over decliners 2-1 & NAZ declined 91.  The MLP index added 1+ to the 288s & the REIT index added 1+ to 444.  Junk bond funds fluctuated & Treasuries continued to see buying which brought lower yields.  Oil remained higher, up 1+ to 70, & gold was 2 lower to 2608 (more on both below).

Dow Jones Industrials 

Charter Communications (CHTR) CEO Chris Winfrey said he wants customers to think of reliability & credibility when they think of their cable & broadband provider.  The cable giant said it is unveiling a series of changes to bolster that goal, including rolling out new bundles & pricing, increasing internet speeds, offering credits for service outages & promising heightened reliability for customers.  CHTR, which provides broadband, cable TV and mobile services & is known to customers under the name of Spectrum, said it is also trying to make the company more approachable & remove the longtime negative connotations around cable companies by announcing Spectrum's new “first-of-its-kind customer commitment,” branded as “Life Unlimited.”  The rollout comes as CHTR & its industry peers contend with several trends: slowing broadband customer growth, continued defections from the cable TV bundle, & a young but speedily expanding mobile business.   “It is hard to be loved when you’re providing a critical service to the household that’s a physical infrastructure that charges over $100 a month,” Winfrey said.  “And to the extent there’s a problem, sometimes somebody has to enter your home ... in the same vein that it is for an electrician or plumber.”  The first step to changing a less-favorable consumer view is with “pricing and packaging that creates more value than you can replicate anywhere else in the marketplace,” he added.  Spectrum said it will charge as low as $30 a month for its 500Mbps internet plan, or $40 a month for 1GB service, when either are bundled with 2 mobile lines or cable TV.  The company is also increasing the baseline internet speed for current customers at no additional cost.  The company also said it's planning to be upfront about costs.  Under its new plan, taxes & fees are baked in, there are no annual contracts & pricing is guaranteed up to 3 years.  CHTR even eliminated the 99¢ it had tacked on to most of Spectrum's pricing in the past.  In addition, Spectrum pledged to give customers credits when the company's customer service doesn't live up to its promises, or for internet outages that are out of the customer's control but are due to an issue on the company's part & last more than 2 hours.  Service issues such as those caused by weather, natural disasters or power outages don’t count.  Life Unlimited, a new platform for Spectrum's internet, mobile & TV services, will roll out across its 41-state footprint this week.  The stock went up 3.20.

Charter rolls out new Spectrum pricing and internet speeds, aims to give ‘a better service operator'

The cost of owning a vehicle in the US has soared over the past few years & data indicates Americans are likely to be hit with even more sticker shock.  A recent report from auto shopping guide Edmunds points to a notable disconnect between what car buyers plan to spend on their next vehicle versus the average prices for new & used vehicles on dealership lots today.  Edmunds found that 73% of consumers report that they have held off purchasing their next vehicle because of elevated prices, which have surged since the pandemic due to supply chain issues & low inventory.  Nearly ½ of new car shoppers (48%) surveyed in the study said they would like to spend $35K or less on their next vehicle, & 14% said they’d like to spend $20K or less.  However, Edmunds data shows the average transaction price for a new vehicle was $48K in Jul & there were nearly zero new auto transactions under the $20K mark.  Prospective car buyers can also expect an unpleasant surprise in financing for their next ride.  Insuring a vehicle is set to climb, too.  A report released by Insurify last month found auto insurance premiums rose 15% in the first ½ of 2024 & the company projects the increase will reach 22% on the year.  It appears most consumers know they will have to prepare to pay more for a vehicle, with 54% of car shoppers telling Edmunds they plan on working more hours or taking on a new job to afford their next vehicle purchase.   But the higher costs might be more than many had bargained for.  More Americans are already having more difficulty making their car payments this year.  A recent study by Cox Automotive found the volume of repossessed vehicles at Manheim auctions, the largest wholesale marketplace, is up 23% year over year thru the first ½ of 2024.  They are also up 14% compared with the same period in 2019.

Car affordability concerns won’t go away anytime soon, data shows

Amazon (AMZN) is instructing corp staffers to spend 5 days a week in the office, CEO Andy Jassy wrote in a memo.  The decision marks a significant shift from its earlier return-to-work stance, which required corp workers to be in the office at least 3 days a week.  Now, the company is giving employees until Jan 2 to start adhering to the new policy.  Corp employees will be expected to be in the office 5 days a week “outside of extenuating circumstances” or unless they’ve been granted an exception by their organization's S-team leader, Jassy said, referring to the close-knit group of execs that report to him.  “Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward — our expectation is that people will be in the office outside of extenuating circumstances,” Jassy added.  AMZN also plans to simplify its corp structure by having fewer managers in order to “remove layers and flatten organizations,” Jassy continued.  Each S-team organization will be expected to increase the ratio of individual contributors to managers by at least 15% by the end of the first qtr of 2025.  Individual contributors refers to employees who typically don't manage other staffers.  The company rapidly grew its headcount over the course of the pandemic before Jassy took the helm & instituted widespread cost cuts across AMZN, including the largest layoffs in its 27 years as a public company.  AMZN's headcount totaled 1.53M employees in the 2nd qtr, representing growth of just 5% from a year earlier.  By comparison, its workforce expanded by 14% to 1.52M employees in the 2nd qtr of 2022.  The stock fell 1.60.

Amazon tells employees to return to office five days a week

Gold rose to a record as markets waited for the Federal Reserve to begin easing monetary policy for the first time in more than 4 years.  Bullion climbed as much as 0.4% to a high of $2589 an ounce, extending last week's 3.2% gain, ahead of the Fed's Sep 17-18 meeting that's widely expected to result in a rate cut of at least 25 basis points.  Gold has gained more than a qtr this year & last hit a record on Fri, supported by the Fed's signals it would pivot to monetary easing.  Central-bank buying & strong haven demand due to conflicts in the Middle East & Ukraine have helped the advance.  Interest from retail investors is also picking up.  Spot gold advanced 0.4% to $2587.  The Bloomberg Dollar Spot Index dipped 0.3%, after declining 0.8% over the previous 3 sessions.

Gold Climbs to Another Record With Fed Rate Cut Expected in Days

West Texas Intermediate (WTI) crude oil closed higher as tight supply on reduced output from the Gulf of Mexico & Libya offset further weak economic data from China ahead of expected US interest-rate cuts this week.  WTI crude oil for Oct closed up $1.55 to settle at $70.06 per barrel, while Nov Brent crude, the global benchmark, was last seen up $1.16 to $72.77.  The rise comes even as China, the #1 importer, over the weekend reported the latest in a series of weak economic reports.  It was reported the country's industrial output weakened in Aug, while retail sales & new home prices dropped again.  Weak demand from China was behind cuts to 2024 demand forecasts from OPEC, the Energy Information Administration & the Intl Energy Agency last week.  Brent oil prices have dropped 18% over the past 6 months due to China's slow economy even as global demand remains above production.  Last week the IEA & OPEC in their monthly reports for once, in varying degrees, agreed that oil demand in the future looked increasingly problematic with much of the worry in forecast emanating from the state of China.  Those concerns are once again with merit as data over the weekend continued to point to an economy in decline.

WTI Oil Rises as Tight Supply Offsets More Weak Economic Data From China

The stock market traded mixed, with tech names struggling.   But there are rising bets that the Fed will opt for a more drastic 50 basis point cut in its monetary policy decision at the end of its 2-day meeting.  This week should be an interesting one for trading.