US stocks edged lower after a round of economic data reminded Wall Street that stagflation is here. Stocks won’t be able to do much as summer trading volumes are here and ahead of a pivotal inflation report. Tech stocks continue to weaken after another semiconductor maker delivered a revenue warning. It appears it is a challenging market for everyone after both Nvidia and Micron had to slash their outlooks. Micron’s business update blamed the disappointing outlook as macroeconomic factors and supply chain constraints persist. Micron noted they have seen a broadening of customer inventory adjustments. After falling the most in the first half of the year, it seems Big Tech’s recent rebound might be overdone.
Micron
Wall Street read Micron’s filing and highlighted, “we expect significant sequential declines in revenue and margins.” Micron shares have already been beaten up for most of the year, so this might not be that bad of a rough patch for Micron investors. The news wasn’t all negative for Micron as they also announced they will be taking advantage of grants and have the biggest investment in US memory manufacturing. The $40 billion investment is expected to create around 40,000 jobs.
Too much attention is going to the FBI search of former President Trump’s Florida resort. The investigation into the handling of presidential documents, some being classified, is setting off a political uproar that could help spark Trump’s presidential run if he decides to run again in 2024.
US Data
The NFIB small business report did not paint an optimistic picture as businesses struggle to navigate through historic inflation, labor shortages, and supply chain disruptions. The headline reading unexpectedly rose 0.4 points in July to 89.9, which is really a miniscule improvement when you consider how far it has plunged. Some business owners are expecting better business conditions, but that is only happening after last month’s record low. Selling prices eased somewhat, but the net percent still raising prices is inflationary.
Housing Market
A big uptick in Redfin’s records showed the housing market is starting to cool. For the month of July, homes that were on the market for 30 days or longer without going under contract rose 12.5% from a year ago. This was the first year-over-year increase since the beginning of the pandemic and almost the biggest increase on record, for this decade-old report.
The brightest spot in the economy during the pandemic is feeling both the impact of the Fed rate increases and a weakening consumer.
Bitcoin
Bitcoin’s rally is stalling as crypto traders need to see what happens with tomorrow’s inflation report. Inflation is what killed Bitcoin late last year and if pricing pressures are showing significant signs of easing, Bitcoin might be able to burst above its recent trading range.
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With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
