🛢 Sudden Rally Sends Oil To Weekly Gains

📈Oil prices rose on Friday, extending their rally and putting crude oil on track for a weekly gain as production disruptions in the US Gulf of Mexico followed Hurricane Francine, which forced the evacuation of production platforms. Oil broke a series of weekly declines, despite Brent falling below $70 a barrel for the first time since late 2021 on Tuesday.

💵A weaker US dollar also helped support oil prices. The currency fell to a one-week low on Friday, making dollar-denominated goods cheaper for holders of other currencies.

🔗Oil producers assessed damage and conducted safety checks on Thursday as they prepared to resume operations in the US Gulf of Mexico. Official data showed that nearly 42% of the region's oil production had been shut down as of Thursday. UBS analysts forecast that production in the region will fall by 50,000 barrels per day (b/d) in September compared to the previous month.

🔽OPEC and IEA this week lowered their forecasts for demand growth, citing economic difficulties in China, the world's largest oil importer. In the United States, oil inventories also rose across the board last week as crude oil imports increased and exports fell

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⚡️Boeing Risks Getting Junk Credit Rating Due To Workers' Strike

⏺Boeing's unsecured debt credit rating has been Baa3 by Moody's Ratings since April. Moody's said Friday it will "assess the duration of the strike and its impact on cash flow, as well as potential equity raisings that Boeing may undertake to improve its liquidity."

⏺Boeing is fighting to maintain its investment grade rating, a task now complicated by a workers' strike. The company has more than $45 billion in debt and is bleeding money after being forced to cut production following a disaster in January.

⏺If the company's rating is downgraded to junk, it will increase Boeing's borrowing costs. The company is also losing money on some defense contracts, and its space business has been plagued by delays and cost overruns. There are other financial consequences of a downgrade, such as a smaller pool of investors willing to buy the company's debt.

⏺CFO Brian West told analysts at Morgan Stanley conference on Friday that the company will consider the necessary steps to strengthen its balance sheet. The aircraft maker is assessing its capital structure to ensure it can meet its upcoming debt payment over the next 18 months, he said.

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🕯 Most Volatile Stocks / 13.09.2024

🔽Boeing stock lost 4% after factory workers went on strike at midnight Friday. Boeing announced a deal on Sept. 8 with the International Association of Machinists and Aerospace Workers, representing 33,000 of its West Coast employees. Although IAM describes the proposal as “the best contract negotiated in history,” Boeing workers in Seattle and Oregon voted 94.6% against the agreement and 96% in favor of a strike, far more than the two-thirds vote needed for a work stoppage, which will disrupt the production of most aircraft, including the 737 Max.

🔽Adobe lost 9% on weak guidance despite its Q3 revenue beat. For the quarter ended Aug. 30 the software company earned $4.65 a share, topping the $4.53 expected by analysts. Quarterly revenue came in at $5.41 billion, an 11% increase from a year earlier and surpassing the $5.37 billion forecast by analysts. But Adobe's Q4 revenue guidance came in below analysts' expectations. The company projected earnings per share ranging from $4.63 to $4.68 on revenue between $5.5 billion and $5.55 billion. Analysts had forecast $4.67 of earnings on $5.61 billion in revenue.

🔼Shares of the furniture retailer RH surged more than 25% Friday, building on momentum from Thursday when the company reported revenue and earnings that topped estimates. RH said demand — defined by the company as the value of orders placed — jumped 7% in the second quarter and said that may double in the third quarter. Investors are buying into the narrative that RH's latest product assortment is driving the growth. After all, the company is gaining sales despite an environment of high interest rates and a challenging housing market.

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🏘 Mortgage Rates Fall To Lowest Level Since February 2023

📉The average rate on a 30-year fixed mortgage fell this week as potential homebuyers and investors turn their attention to the Federal Reserve’s interest rate decision on Wednesday. At 6.2%, the rate dropped slightly compared to 6.35% a week earlier, according to Freddie Mac data released Thursday. It’s down from 7.18% a year ago and sits at the lowest level since February 2023.

ℹ️Mortgage rates have slid steadily in recent months, but the relief for buyers has done little to boost home sales nationwide. The Pending Homes Sales Index, a measure of housing contracts, slipped in July to 70.2, the lowest reading since the National Association of Realtors began tracking it more than two decades ago. A year ago, the index stood at 76.7.

🔔Some buyers may be waiting in hopes that mortgage rates will fall further if the Federal Reserve cuts benchmark interest rates as expected next week. Signs of a slowing job market and cooling inflation in August have strengthened the case for the central bank to ease rates for the first time in more than four years.

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☄️GameStop Shares Plunge 12% Amid Weak Revenue

📊The owner of the chain of video game and gaming electronics stores GameStop recorded a net profit in the second fiscal quarter ended September 10, but revenue fell by almost a third and was below market forecasts.

ℹ️Unexpectedly for many, the company managed to record a net profit of $14.8 million, or 4 cents per share, against a loss of $2.8 million, or 1 cent per share, a year earlier. Revenue in the reporting period fell by 31% YoY to $798 million, which fell short of market forecasts. As a result, GameStop shares fell 12% during yesterday's session.

🟢In June, GameStop said it raised $2.14 billion in a stock sale, noting that it may use the proceeds for mergers and acquisitions. The company did not hold a conference call in conjunction with its earnings report.

📈GameStop shares, which were lifted by the return of influential trader Keith Gill, also known as Roaring Kitty, to social media earlier this year, are up 33.8% in 2024 through Tuesday. The S&P 500 index SPX is up 15.2% this year.

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☄️ Analysts Propose Excluding Boeing From Dow Jones Index

✈️ Boeing, one of 30 companies that represent the American economy in the Dow Jones Industrial Average, may no longer qualify. Recent security incidents and investigations have raised doubts about the company's future.

✂️Rating agencies have cut Boeing's credit rating to the low end of "investment grade" and are expected to further decline to "junk" levels.

📊Boeing has lost more than 60% of its stock price since the second 737 Max crash in 2019. Companies with better financial health, such as Lockheed Martin and GE Aerospace, could replace Boeing in the index.

ℹ️Boeing remains the largest U.S. exporter, supporting 1.6 million jobs. The question is not its survival, but whether Boeing remains one of the key indicators of the "health" of the American economy.

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⚡️Core US Inflation Has Risen, Reducing The Likelihood Of A Large-scale Fed Rate Cut

⏺The so-called core consumer price index, which excludes food and energy costs, rose 0.3% from July, the highest in four months, and up 3.2% year on year, bureau data showed labor statistics on Wednesday.

⏺Overall, inflation in the US in August was 0.2% on a monthly basis and 2.5% on an annual basis. August marked the fifth month in a row that the annual rate declined due to lower gasoline prices. The Bureau of Labor Statistics said housing was the "major factor" in overall growth.

⏺While Wednesday's data won't keep the Fed from cutting interest rates next week, it does reduce the likelihood of a sharp rate cut. However, Fed officials have previously signaled that they are largely focused on the labor market, which will likely determine political discussions and decisions in the coming months. They will also have more data to consider ahead of their meetings in November and December.

⏺Traders have reduced the likelihood that the Fed will cut rates by half a point next week to almost zero. Treasury yields rose, S&P 500 futures fell slightly and the dollar trimmed its losses following the data.

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🕯 Most Volatile Stocks / 10.09.2024

🔼Oracle shares surged more than 10% Tuesday after the company reported earnings that beat expectations, thanks to increased demand for its cloud services offerings. The Texas-based company's push into the cloud computing market is showing promising results and it has started narrowing the gap with market leaders Microsoft and Amazon Web Services. Oracle Cloud Infrastructure remains strong and sustained demand for cloud compute is expected, particularly in AI applications. Oracle also announced a new partnership with Amazon's AWS, further adding to its growing database opportunities.

🔽Shares of the tech giant Apple edged lower, falling about 1% on Tuesday, after it lost an EU court battle over a $14 billion tax bill. The development comes just one day after its iPhone 16 launch disappointed on the AI side, with Wall Street analysts underwhelmed by the phone's new features. The EU’s Court of Justice in Luxembourg backed a landmark 2016 decision that Ireland broke state-aid law by giving Apple an unfair advantage. In another victory for the EU’s antitrust chief Margrethe Vestager, the same court ruled that Google illegally leveraged its search-engine dominance to give a higher ranking to its own product listings.

🔽Shares of the chimaker Taiwan Semiconductor dropped 3% despite strong sales for the month of August. The company's revenue rose 33% last month, a positive signal when it comes to the smartphone market's recovery and demand for Nvidia's AI chips. Wall Street is betting on a bounce-back in demand for mobile devices backed by Apple’s adoption of Wi-Fi 7 on the iPhone 16 and 16 Pro. Taiwan Semiconductor stock has increased 82% in the last 12 months.

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