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Housing, oil reports, Q3 earnings and more: Wednesday’s 5 things to know

Here are the main events taking place on Wednesday this could have an impact on trade.

ACCOMMODATION REPORT DUE: Another housing report is on deck for investors at 8:30 a.m. ET Wednesday morning, when the Commerce Department is expected to say the number of new homes under construction in September fell 6.3% to an annual rate seasonally adjusted 1.475 million.

This would follow a strong and unexpected surge of 12.2% in August, led by the construction of multi-family dwellings.

Housing starts fell 13% in the four months since April, when they hit a nearly 16-year high of 1.810 million (the highest since June 2006) as building costs rise borrowing and rising prices have reduced affordability.

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Homes under construction in the Norton Commons subdivision in Louisville, Kentucky, USA, Friday, July 1, 2022. (Luke Sharrett/Bloomberg via Getty Images/Getty Images)

Future building permits, a good indicator of property activity ahead, are expected to fall 0.8% to 1.530 million in September, the lowest since August 2020 (for context, January’s print of 1.899 million was highest since May 2006).

It would also be the sixth consecutive monthly decline in building permits, which has not happened since January 2009, towards the end of the global financial crisis.

The report follows the NAHB Housing Market Index, released on Tuesday morning, which fell more than expected to the lowest since May 2020 as high mortgage rates and rising construction costs weighed on the mood. home builders.

OIL INVENTORY: The DOE’s Energy Information Administration will release its inventory report for the past week at 10:30 a.m. ET on Wednesday.

Crude oil inventories are expected to rise by 1.38 million barrels, following a much larger than expected increase of nearly 10 million barrels the previous week.

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Teleprinter Security Last To change To change %
USO US OIL FUND LP 68.73 -1.38 -1.97%
CLC CHEVRON CORP. 162.76 +1.34 +0.83%
XOM EXXON MOBIL CORP. 100.87 +0.24 +0.24%

Watch for declines of more than 2 million barrels in distillate supplies (heating oil, diesel fuel) and just over 1 million barrels in gasoline inventories.

Oil prices have trended lower on slowdown concerns since hitting a 5-week high two weeks ago after OPEC+ announced production cuts of 2 million barrels per day .

3T GAINS: Healthcare will be the focus of third-quarter earnings reports on Wednesday morning with insurer Elevance Health (formerly Anthem) and healthcare equipment maker Abbott Labs reporting ahead of the opening bell.

Teleprinter Security Last To change To change %
ELV ELEVANCE HEALTH INC. 478.27 +1.19 +0.25%
ABT ABBOTT LABORATORIES 104.98 +1.42 +1.37%
PG PROCTER & GAMBLE CO. 128.56 +1.11 +0.87%
TRV COS TRAVELERS. INC. 167.09 +2.27 +1.38%

We’ll also get numbers from two Dow members: household goods giant Procter & Gamble and property and casualty insurer Travelers Companies.

Teleprinter Security Last To change To change %
TSLA TESLA INC. 220.19 +0.84 +0.38%
IBM INTERNATIONAL BUSINESS MACHINES CORP. 123.11 +1.51 +1.25%
MTB M&T BANK CORP. 189.47 +1.60 +0.85%
ALLY ALLY FINANCIAL INC. 28.79 -1.32 -4.38%

In the afternoon, the spotlight will turn to electric vehicle maker Tesla, with another Dow component – software services and cloud computing firm IBM – also coming online.

THE MARKET ADVANTAGE IS HIGHER: US stock indices rose on Tuesday, rallying for a second day as a combination of better-than-expected earnings and easing turmoil in UK markets boosted investor confidence.

The S&P 500 climbed 42.03 points, or 1.1%, to 3,719.98 while the Dow Jones Industrial Average rose 337.98 points, or 1.1%, to 30,523.80 and the Nasdaq Composite , which is tech-heavy, rose 96.60 points, or 0.9%, to 10772.40.

The moves come a day after the major indices soared. Big swings have become commonplace for U.S. stocks, with the S&P 500 closing up or down at least 2% in the previous three trading sessions.

Even with a few higher runs, all three indices remain in a bear market, entered after a decline of 20% or more from a recent high.

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New York Stock Exchange workers speak

Traders work on the floor of the New York Stock Exchange in New York, Wednesday, June 15, 2022. (AP Photo/Seth Wenig/AP Images)

“When you’re in a bear market, to see meaningful upside moves for equities, you need to see significant movement in bond markets as well. You need yields to drop significantly,” Michael said. Antonelli, General Manager and Market Director. strategist at Baird. This does not happen.

Instead, US government bond yields rose, with the yield on 10-year Treasuries settling above 4% for the first time since 2008 on Friday. On Tuesday, the yield on the 10-year Treasury note fell slightly to 3.996% from 4.012%.

Yields and bond prices move in opposite directions. Investors had braced for a tough earnings season, with threats of runaway inflation, rising interest rates and sluggish growth weighing on consumer spending and corporate earnings. But so far the results have been better than expected, prompting a rally in US stock markets after months of declines.

On Tuesday, Goldman Sachs rose $7.14, or 2.3%, to $313.85 after saying earnings fell last quarter but remained above targets.

Shares of Lockheed Martin rose $34.53, or 8.7%, to $431.84 after the defense company said its earnings rose and maintained its full-year guidance.

Meanwhile, shares of Salesforce Inc. rose $6.35, or 4.3%, to $153.53 and Splunk Inc. gained $2.11, or 2.8%, to 76.15. $ after activist hedge fund Starboard Value LP discussed the firm’s holdings at a conference.

After the market shut down, Netflix said it added more than twice as many new subscribers as expected in the last quarter. Shares of the streaming giant are up 16% in recent after-hours trading. Shares of United Airlines also rose 8.3% in after-hours trading after strong results.

WHERE IS THE ECONOMY? : The average price of a gallon of gasoline is nearly double what Americans paid exactly two years ago, but White House press secretary Karine Jean-Pierre on Tuesday touted savings at the pump.

“Each month, the typical two-driver family is saving about $120 at the pump compared to where we were in mid-June,” Jean-Pierre told a news conference. “Every day, Americans are saving about $420 million at the pumps compared to mid-June.”

The average gallon of gasoline was $3,871 on Monday, down about 23% from the $5,006 Americans were paying in mid-June.

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Despite falling in recent months, gasoline prices are still about 62% higher than they were in January 2021, when President Joe Biden first took office and the average gallon gas was $2,392. Gas prices are about 80% higher than they were exactly two years ago in October 2020, according to data from the Department of Energy.

Energy prices have skyrocketed in the US and around the world The Russian invasion of Ukraine.

OPEC+’s decision to cut oil production last week threatens to reverse the recent downward trend in gas prices as supply becomes tight.

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National oil production fell below 12 million barrels per day this month, more than 1 million barrels per day below November 2019 levels, prompting lawmakers to ask Biden to d increase production in his country.