Dow slid back 3, advancers over decliners 4-3 & NAZ was off 32. The MLP index added 1+ to the 297s & the REIT index rose 3+ to the 407s extending recent strength. Junk bond funds inched higher & Treasuries had limited selling which raised yields a little. Oil fell almost 1 to just above 82 & gold went up 8 to 2468.
Dow Jones Industrials
Online spending in the U.S. surged 11% year over year to $14.2B during Amazon's (AMZN) 48-hour Prime Day event, topping estimates & setting a new record, according to Adobe Analytics. Adobe said the strong showing was driven by back-to-school shopping & an “apparent product refresh cycle,” as consumers looked to snap up new tablets, TVs & Bluetooth speakers in droves. That's a shift from last year, when inflation-weary shoppers used the discount event to stock up on household essentials like pantry staples & office supplies. The company had predicted US shoppers would spend $14B online during the 2-day event. Adobe tracks transactions not just on AMZN but also across a wide swath of US retail sites. Amazon's Prime Day event, which ran Tues & Wed, has become a big revenue driver for other retailers, which often hold competing sales timed around Prime Day. AMZN said it also saw “record-breaking” Prime Day revenue, though it didn't disclose total sales from the event. The company touted its Rufus shopping assistant, which uses generative artificial intelligence to suggest products & give order updates, saying the tool “helped millions” of shoppers browse the site. AMZN last week made Rufus available to all US users after testing it with a subset of shoppers. Numerator, which tracked purchases across more than 35K households, said shoppers spent more per order this year, with an average order size of $57.97, up from $54.05 during last year's event. Shoppers snapped up AMZN-branded Fire TV sticks, Premier protein shakes & Liquid IV packets, while home goods & household essentials, as well as apparel & shoes, were among the top categories, the firm found. “Shoppers purchased fewer big-ticket items than we’ve seen in past years, and fewer participants placed multiple orders throughout the sale, indicating a shift to more conscious shopping and a preference for saving over splurging,” Numerator analyst Amanda Schoenbauer said.
Amazon Prime Day drives U.S. online sales to record $14.2 billion
The European Central Bank (ECB) left interest rates unchanged in a unanimous vote following Jun's landmark cut, as it described the potential for a Sep cut as “wide open.” “Monetary policy is keeping financing conditions restrictive. At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year,” the ECB's Governing Council said. Recent data has broadly supported its medium-term inflation outlook for inflation to converge at 2%, it added. The decision, which keeps the key ECB interest rate at 3.75%, was widely expected amid ongoing concern over inflationary pressures, particularly from the labor market. Euro zone headline inflation dipped to 2.5% in Jun from 2.6% previously, but the core print, excluding the volatile components of energy & food, came in above the forecast, holding steady at 2.9%. Analysts expected the central bank to wait for more data across payrolls, economic growth & productivity before easing monetary policy further. “Wages are still rising at an elevated rate, making up for the past period of high inflation. Higher nominal wages alongside weak productivity have added to unique labor cost growth, although it decelerated somewhat in the first quarter of this year,” ECB Pres Christine Lagarde said. Lagarde added that the central bank expects inflation levels to fluctuate for the rest of the year but decline overall in the 2nd ½ due to weaker labor costs, the impact of monetary policy & the fading impact of price shocks. The ECB had cited the inflation outlook, the dynamics of underlying inflation & the strength of monetary policy transmission as the reasons behind trimming rates in Jun, in the bank’s first such cut since 2019. The Governing Council said it would continue to monitor those areas & that it was “not pre-committing to a particular rate path.” However, market pricing suggests firm expectations for 2 more 25 basis point cuts this year, in Sep & Dec, with a pause during the central bank's Oct meeting.
ECB holds interest rates, says domestic price pressures ‘still high’
Ford (F) is investing $3B to expand production capacity for one of its most popular & profitable vehicles. The
company announced that it's adding its 3rd North American
assembly plant for its F-Series Super Duty trucks, its heavy-duty line
of pickups. The plan will initially add capacity for 100K vehicles. The plant, located at Oakville Assembly Complex in Ontario, Canada, is an effort by the company to maximize its manufacturing footprint & expand its Ford Pro commercial business. Of the $3B, Ford will invest $2.3B in the Oakville complex. The company's Kentucky Truck Plant & Ohio Assembly Plant, which also
manufacture the heavy-duty trucks, are already running at full capacity. "Super Duty is a vital tool for businesses and people around the
world and, even with our Kentucky Truck Plant and Ohio Assembly Plant
running flat out, we can’t meet the demand," CEO Jim Farley said. While
the move specifically benefits the Ford Pro commercial business, Farley
said the factory will also pave the way for future multi-energy
technology, supporting the company's electrification plans. Ford is planning to introduce 3-row electric utility vehicles. In the first ½ of the year, the Kentucky Truck Plant & Ohio Assembly Plant produced more than 200K Super Duty trucks. Ford's Chief Operating Officer Kumar Galhotra believes this investment "will have a fast payback." The stock went up 27¢.
Ford investing $3B in F-Series Super Duty truck expansion to meet demand
The rally for the stock market has hit increasing turbulence this week as political, geopolitical & trade risks unsettle a market finally confident that the Fed will cut interest rates this year. A sign the labor market is cooling further bolstered those rate-cut hopes today. The number of continuing applications for unemployment benefits once again hit its highest level since Nov 2021, signaling unemployed workers are struggling to find new jobs. The stories above about strong retail sales & the ECB announcement (see above) will also be discussed at the FOMC meeting next week. Meanwhile demand remains strong for safe haven gold.
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