Investors are keenly awaiting the release of August retail sales data on Tuesday, which will provide crucial insights into the health of the U.S. consumer just before the Federal Reserve’s rate decision. Economists surveyed by Dow Jones predict a 0.2% decline in retail sales, though they expect a 0.2% increase when excluding auto sales. These figures could significantly influence the Fed’s decision on rate cuts. Wall Street is particularly attentive, with the possibility of a 50-basis point cut still on the table. However, the chief global strategist advocates for a more measured approach, suggesting a 25-basis point reduction would be more prudent.

European stocks experienced an uptick on Tuesday, driven by anticipation surrounding upcoming central bank meetings. Commerzbank shares reached a 12-year high following reports that UniCredit is seeking European Central Bank approval to acquire a 30% stake in the company, although the shares later leveled off to trade nearly flat. In the retail sector, stocks rose by 2.15%, with British home improvement firm Kingfisher leading the charge, surging 6.4% after raising the lower end of its profit forecast due to improved sales.

In August, Singapore’s non-oil domestic exports saw a significant increase of 10.7% compared to the same period last year. Meanwhile, India’s wholesale prices for August are expected to show a year-on-year increase of 1.85%, a slight decrease from the 2.04% rise observed in July. Additionally, Chinese appliance manufacturer Midea Group made a strong debut on the Hong Kong stock exchange, with its shares surging over 9% following the city’s largest IPO in more than three years.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include FERG.  There are no notable reports after the bell today.

News & Technicals’

The Biden administration has granted Intel up to an additional $3 billion under the CHIPS and Science Act for the “Secure Enclave” program, aimed at boosting the supply of microelectronics for the Department of Defense. This funding supports Intel’s efforts to construct foundry plants in four states, enhancing domestic semiconductor manufacturing capabilities for various suppliers. Earlier in March, Intel received up to $8.5 billion under the same act, underscoring the administration’s commitment to strengthening the U.S. semiconductor industry and ensuring a secure supply chain for critical technologies.

Amazon CEO Andy Jassy has announced a new directive requiring corporate employees to work from the office five days a week, a shift from the previous policy of three days a week. This change aims to foster greater collaboration and productivity. Additionally, Amazon is restructuring its corporate hierarchy by reducing the number of managers in each organization, which is intended to streamline operations and enhance decision-making efficiency.

Amazon CEO Andy Jassy has announced a new directive requiring corporate employees to work from the office five days a week, a shift from the previous policy of three days a week. This change aims to foster greater collaboration and productivity. Additionally, Amazon is restructuring its corporate hierarchy by reducing the number of managers in each organization, which is intended to streamline operations and enhance decision-making efficiency.

On Monday, Apple unveiled iOS 18, the latest iteration of its iPhone software, marking the company’s most significant update of the year. Despite the anticipation, this version does not feature Apple Intelligence, the company’s upcoming AI system. The release focuses on enhancing user experience with various improvements and new features, setting the stage for future innovations. As users explore iOS 18, the tech community eagerly awaits the integration of Apple Intelligence in subsequent updates.

Oracle Chairman Larry Ellison has ascended to the position of the second-richest person in the world, boasting a net worth of $206 billion. This milestone unseats Amazon founder Jeff Bezos, who had intermittently held the title since 2016. Oracle’s shares surged by 20% in September, setting them on course for their best month since October 2022. This remarkable stock performance is largely attributed to Oracle’s pivotal role in the burgeoning artificial intelligence sector.

As we wait on the highly anticipated rate decision from the FOMC, we will still have to parse the results August retail sales and industrial production reports early this morning.  The T2122 indicator is nearly at its upper limit so once again watch for a potential whipsaw on this morning’s gap up open that may finally make a near record high in the SPY.  Don’t be too surprised after the morning volatility if choppy price action conditions return with the uncertainty of the Fed decision looming.

Trade Wisely,

Doug