Coffee With Greta: The Fed Is Dead Ahead


DJIA Futures: +13 (+0.04%)

SPX Futures: +2 (+0.1%)

NASDAQ Futures: +10 (+0.1%)

Good morning friends!

Futures are flat as traders gear up for new economic data.

Let’s get right to it!

Futures Flat with JOLTS, Fed Minutes Ahead

Futures are flat with the focus on new jobs data and the Fed. 

The Labor Department releases the May Job Openings and Labor Turnover Survey (JOLTS) at 10:00 a.m. ET. 

That is expected to show the number of available jobs fell to 11.1 million from 11.4 million in April.

The Fed then releases the minutes of its June meeting at 2:00 p.m. ET. 

Traders are eyeing that readout for more clarity on the bank’s plans for larger rate hikes moving forward. 

The Fed raised rates by 0.75% in June and the Fed Chair signaled they will consider more hikes of that size to combat inflation. 

Treasury Yields Fall, Curve Remains Inverted

Recession alarms are sounding as a key part of the Treasury yield curve is still inverted. 

The 2-year Treasury yield is down about 5 basis points at 2.77% while the 10-year yield is down 5 basis points at 2.75%.

An inversion between the 2-year and 10-year yields is typically seen as a sign the economy is weakening and a recession is on the horizon. 

Mortgage Demand Falls Despite Lower Rates

Mortgage demand slipped last week even as rates dropped for the second week in a row. 

The Mortgage Bankers Association shows purchase applications fell 4% weekly and 17% year-over-year. 

Refinance applications dropped 8% weekly and tumbled 78% compared to a year ago. 

The average 30-year contract rate pulled back to 5.74% from 5.84% the prior week. 

The drop in rates followed the decrease in Treasury yields as mortgage rates typically track with the 10-year yield.

Oil Prices Rebound on Supply Concerns

Oil prices are bouncing back after Tuesday’s drop as supply worries take over. 

West Texas Intermediate crude futures are up 1% at over $100 bbl while Brent crude futures are rising 1.8% to over $104 bbl.

The rebound comes after WTI crude closed below $100 bbl for the first time since late April on Tuesday. 

Analysts expect volatility to continue as the market grapples with supply worries against economic growth concerns. 

Gas Prices Continue Pullback

U.S. gas prices are still falling as demand drops.

AAA shows the national average for regular gas fell to $4.779/gal today. 

That’s down nearly 10 cents from a week ago and nearly 24 cents from the record-high.

Diesel also fell to $5.716/gal, down a full cent from yesterday.

The Energy Information Administration shows U.S. gasoline demand at 8.93 million barrels per day, down from 9.11 million bpd at the same time last year.

Amazon Partners with Grubhub

Amazon (AMZN) Prime members will now get a free year of Grubhub deliveries. 

The online retail giant announced that deal with the food delivery service today.

It also includes an option for Amazon to acquire an up to 15% stake in the company.

The news is dragging down competitors like Uber (UBER) and DoorDash (DASH).

UBER shares are down 3.3% ahead of the open while DASH is tumbling 6.9%.

Spirit Wins Newark Peak-Hour Flights

Spirit Airlines (SAVE) shares are flat ahead of the open after the government shifted peak-hour runway timings at Newark Airport to the company.

The U.S. Transportation Department said this “secures low-cost service options for Newark customers and improves competition in the Newark market.”

Southwest Airlines (LUV) previously operated those timings but pulled out of Newark in favor of LaGuardia in 2019.

Spirit beat out JetBlue (JBLU) and Alaska Air Group (ALK) for the approvals. 

Spirit said it will “continue to promote competition and offer affordable, high-value travel options for guests traveling in and out of the New York Metropolitan area.”

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