Here are five key things that could impact Monday’s trading.
NO APOLOGIES: Disney CEO Bob Chapek made no apologies for his company’s campaign against Republican education reforms in Florida earlier this year, saying Disney “stood our ground” in the incident.
Disney pushed back on Republican Florida Gov. Ron DeSantis earlier this year for his push to ban discussion of sexual or gender identity in young students’ classrooms. Hollywood celebrities and Disney staff were outraged, dubbing the legislation the “don’t say gay” bill. Chapek now said Disney is trying to be “everything to everybody.”
“These are complex social issues where we absolutely, positively want to represent the needs and the expectations of our cast members, but we also realize that sometimes in such a divided world, there’s not alignment between what possibly large constituencies of our guest and consumer base are looking for in terms of the kind of content that they want to show their kids at this particular time,” Chapek said.
“What we try to do is be everything to everybody. That tends to be very difficult because we’re the Walt Disney Company,” he added.
Chapek went on to argue that Disney’s conflict with DeSantis was overly politicized.
“When you’re a lightning rod for clicks and for political podium speeches, the essence of our brand can be misappropriated or misused to try to fit the needs of any one particular group’s agenda. We want to rise above that,” he added. “We also realize that we want to represent a brighter tomorrow for families of all types, regardless of how they define themselves.”
CALIFORNIA GAS CAR BAN: Secretary of Transportation Pete Buttigieg on Thursday appeared to heap praise on states’ efforts to fight climate change – particularly California’s gas car ban – which go well beyond policies set at the federal level.
In an interview with FOX 11’s “The Issue Is” that aired Friday, Buttigieg was asked to comment on California’s plan to ban new gas cars by the year 2035 in favor of electric vehicles and whether that could be a national model. The ban was passed just days before the state began struggling with keeping the lights on during a late summer heatwave.
Buttigieg evaded answering directly whether the Biden administration would implement a similar policy, but said it was “interesting” that some states “were trying to go above and beyond what we’re doing at the federal level.”
“I’m really interested (in following) these developments, while we continue to set a national policy that’s the baseline for all of this. We need to move in the direction of electric vehicles,” Buttigieg said before acknowledging that some major industries are already moving in this direction independently.
“But we’ve got to make sure that this happens quickly enough to help us beat climate change. We’ve got to make sure it happens affordably enough that’s it not just wealthy people, but (also) low-income people who most need those gas savings if they can afford the EV’s in the first place,” Buttigieg said.
More than a dozen states are debating whether to adopt similar plans to California’s gas-powered vehicle bans by 2035. Several of the 17 states are likely to move forward with the plan, including Washington, Massachusetts, New York, Oregon, and Vermont.
Energy Secretary Jennifer Granholm was more explicit in her endorsement of California’s gas-powered car ban, saying recently that she backed it and commended the state for “leaning in” on climate policy.
ECONOMIC REPORTS: Inflation will be a big focus with the release of the August consumer and producer price indices.
Keep in mind these are the last major inflation reports before the Federal Reserve’s September policy meeting, where central bankers are widely expected to raise the overnight bank lending rate by another 75-basis points on Sept. 21.
In addition to inflation data, investors will also weigh reports on retail sales, jobless claims, regional manufacturing, industrial production and consumer sentiment.
DATA DUE: Beginning Tuesday at 8:30 a.m. ET, the Bureau of Labor Statistics is expected to say the consumer price index fell 0.1% month-over-month in August after being unchanged in July. On a year-over-year basis watch for prices climb 8.1% in August, easing back from July’s cooler-than-expected reading of 8.5% (the estimate was 8.7%) and June’s 9.1% surge, the highest inflation rate in almost 41 years (since November 1981).
A cooler pace of CPI growth, together with the smaller than expected increases in the July PCE indices out two weeks ago, would support the view that inflation has peaked. Factoring out volatile food and energy costs, the core consumer price index is anticipated to rise 0.3% in August, matching July’s increase. Annually, core CPI is forecast to climb 6.1% in August. That would snap a 4-month streak of flat or slowing growth after March’s 6.5% spike, the highest in almost 40 years (since August 1982).
On Wednesday, the Bureau of Labor Statistics will report wholesale inflation for August.
The producer price index is expected to slip 0.1% month-over-month according to Refinitiv forecasts, after falling half a percent in July.
Year-over-year, prices paid by wholesalers are anticipated to jump 8.9%. That would be down almost a full percentage-point from July’s 9.8% spike, and the fourth month in the last five of declining annual growth from a record 11.7% surge in March (the final demand index goes back to November 2010).
Excluding food and energy costs, core producer prices are anticipated to rise 0.3% monthly in August, up slightly from July’s 0.2% increase. Year-over-year look for core PPI to rise 7.1% in August, the fifth straight month of slowing growth after a record 9.7% surge in March (data go back to April 2011).
STOCK WEEK IN REVIEW: U.S. stocks rose Friday and posted their first weekly gain in a month, offering a reprieve to a market that had been weighed down by fears of tightening monetary policy.
Stocks began the week lower but then made up ground over the following days, with shares of banks, manufacturers and consumer-discretionary companies helping lead the charge.
Analysts said at least some of the recovery seemed to be fueled by investors looking for bargains after three consecutive weekly losses that had wiped out much of the market’s summer rally.
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Investor sentiment has reached extremely negative levels, Bank of America said in a report Friday. One measure of investor sentiment tracked by the bank, based off hedge fund positioning, flows into credit and equity funds and other factors, has hit rock bottom – an indication that markets look oversold and investors should start buying again, analysts said.
Moreover, earnings results have largely pointed to resilience among U.S. corporations. Walmart and Home Depot shares jumped earlier in the week after the two retailers posted better-than-expected results.
“I don’t see an earnings collapse,” said Jack Ablin, chief investment officer of Cresset Capital. “Obviously, if we go into a recession, it’s a different matter.”
For right now, though, companies seem to be weathering inflation and slowing growth well, he added. The Dow Jones Industrial Average added 377.19 points, or 1.2%, to 32151.71. The S&P 500 gained 61.18 points, or 1.5%, to 4067.36 and the Nasdaq Composite rose 250.18 points, or 2.1%, to 12112.31.
For the week, the Dow rose 2.7%, while the S&P 500 climbed 3.6% and the Nasdaq gained 4.1%. The market’s rally was broad. All 11 sectors of the S&P 500 posted weekly gains for the first time since February 2021, according to Dow Jones Market Data. Earnings drove some of the Friday’s bigger moves.
EARNINGS REPORTS: Kicking off the week on Monday will be earnings from Oracle and Rent the Runway after the bell.
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Nikola founder Trevor Milton will be in the hot seat as he faces a criminal trial for federal fraud charges.
In addition, Blue Origin will launch its New Shepard 23 mission carrying 36 payloads from academia, research institutions and students across the globe.