CNBC Daily Open: Inflation, earnings and the American consumer

 

CNBC Daily Open: Inflation, earnings and the US consumer

This news comes from today's CNBC Daily Open, our new international markets newsletter. CNBC Daily Open brings investors up-to-date information on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here. Japan's Nikkei 225 climbed 0.67% and the Topix rose 0.72% early Thursday. Hong Kong's Hang Seng Index fell 0.95%, while mainland Chinese indices extended their losses. This happened after overnight losses in the main US indices. The Dow Jones Industrial Average was down 0.54% in late trading on Wednesday, while the S&P 500 was down 0.7% and the Nasdaq Composite was down 1.17%. Markets await Thursday's July consumer price index report, which is likely to show that the pace of price growth is easing — but not enough to prompt the Federal Reserve to back off in its fight against inflation.

China has sharply rebuked President Joe Biden's executive order curbing US technology investment — but Beijing has stopped short of issuing immediate countermeasures. China's foreign ministry said the move was "shameless economic coercion". Rather than an outright ban, the measures are aimed at limiting US investment and expertise in semiconductors and microelectronics, quantum computers and certain artificial intelligence capabilities in China, Hong Kong and Macau.

More expensive Disney+

Disney shares rose in after-hours trading after the company pledged in October to raise the price of its ad-free streaming tier and said it would crack down on password sharing. In its earnings release, Disney said subscriber losses continued over the past three months, with a 7.4% decline from the previous quarter larger than Wall Street had expected. That contributed to a net loss of $460 million in the latest quarter, from a net profit of $1.41 billion a year ago.

El Niño effects

The ongoing drought has forced Panama Canal managers to limit slots for shippers to reserve passage. 154 vessels are waiting their turn and the current waiting time to cross the main ship gate is now approximately 21 days. Meanwhile, rice prices rose to their highest level in nearly 12 years due to India's ban on rice exports and adverse weather conditions that could affect production, the UN food agency said. The Food and Agriculture Organization's index of all rice prices for July rose 19.7% from a year earlier to the highest nominal value since September 2011. The sharpest price increase came from Thailand.

As investors wait for the latest inflation report and consider the Federal Reserve's future path, JPMorgan's trading department laid out five potential scenarios for how Wall Street could react, judging by the month-on-month increase.

What do the latest earnings reports say about US consumer behavior?If U.S. airlines — minus low-cost carrier Southwest Airlines — are any indication, Americans still prefer spending money on experiences over shopping.In fact, airlines and hotel chains have reported increases in bookings and rising prices for international travel in recent weeks - at the expense of domestic destinations.Theme park and restaurant operators are also seeing good traffic, although some companies are retreating from the benefits as they chase higher margins.

But toy makers and department stores like Macy's and Nordstrom are warning against tepid holiday spending. Retailers are resorting to promotions and discounts — even Amazon sees the need to lure consumers who plan to start their holiday shopping early by holding a second Prime Day-like sales bonanza in October.It is clear that Americans are very careful about where and how they spend their money in a time of rising prices.

China has sharply rebuked President Joe Biden's executive order curbing US technology investment — but Beijing has stopped short of issuing immediate countermeasures. China's foreign ministry said the move was "shameless economic coercion". Rather than an outright ban, the measures are aimed at limiting US investment and expertise in semiconductors and microelectronics, quantum computers and certain artificial intelligence capabilities in China, Hong Kong and Macau.

More expensive Disney+

Disney shares rose in after-hours trading after the company pledged in October to raise the price on its ad-free streaming tier and said it would crack down on password sharing. In its earnings release, Disney said subscriber losses continued over the past three months, with a 7.4% decline from the previous quarter larger than Wall Street had expected. That contributed to a net loss of $460 million in the latest quarter, from a net profit of $1.41 billion a year ago.

The ongoing drought has forced Panama Canal managers to limit slots for shippers to reserve passage. 154 vessels are waiting their turn and the current waiting time to cross the main ship gate is now approximately 21 days. Meanwhile, rice prices jumped to their highest in nearly 12 years due to India's ban on rice exports and adverse weather conditions that could affect production, the UN food agency said. The Food and Agriculture Organization's index of all rice prices for July rose 19.7% from a year earlier to the highest nominal value since September 2011. The sharpest price increase came from Thailand.

As investors wait for the latest inflation report and consider the Federal Reserve's future path, JPMorgan's trading department laid out five potential scenarios for how Wall Street could react, judging by the month-on-month increase.What do the latest earnings reports say about US consumer behavior?If U.S. airlines — minus low-cost carrier Southwest Airlines — are any indication, Americans still prefer spending money on experiences over shopping.

In fact, airlines and hotel chains have reported increases in bookings and rising prices for international travel in recent weeks - at the expense of domestic destinations.Theme park and restaurant operators are also seeing good traffic, although some companies are retreating from the benefits as they chase higher margins.

But toy makers and department stores like Macy's and Nordstrom are warning against tepid holiday spending. Retailers are resorting to promotions and discounts — even Amazon sees the need to attract consumers who plan to start their holiday shopping early by holding a second Prime Day-like sales bonanza in October. Americans are apparently very careful about where and how they are. spend your money in times of rising prices.