October 1, 2022

Brighton Journal

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Stock futures rise as Wall Street awaits key inflation report

Stock futures rise as Wall Street awaits key inflation report

Unemployment in the UK has reached a 48-year low while real wages have fallen sharply

The UK unemployment rate fell to 3.6% in the three months to July, its lowest level since 1974.

Meanwhile, the economic inactivity rate rose 0.4 percentage points to a five-year high of 21.7%.

The Office for National Statistics attributed the change to an increase in long-term sickness appointments and students leaving the job market. The increasing tightening of the labor market may increase inflationary pressure and cause headaches for Bank of England.

Annual growth in real wages – factoring in inflation – excluding bonuses fell 2.8% in the three months to the end of July.

“It is understood that people will look to their employers for help during the cost-of-living crisis, while Andrew Bailey is hopeful that companies will not raise their salaries too quickly and compound inflation,” said Marcus Brooks, chief investment officer at Quilter Investors.

“However, the UK must brace for discontent among the public sector as payroll strikes continue as budgets are drained.”

– Elliot Smith

UBS plans to increase dividends; Stocks up in pre-market

UBS The Swiss bank said Tuesday that the group intends to increase its dividend by 10% to $0.55 per share, and expects its stake buybacks in 2022 to exceed $5 billion.

UBS shares were signaled to rise 1.2% in pre-market activity after what ZKB analyst Michael Klein called the surprising news.

Read more here.

– Reuters

CNBC Pro: Do ​​you want to invest in real estate? These ETFs are among analyst favorites

Real estate investment trusts – or REITs – are back in the spotlight after a volatile year for many asset classes.

Analysts from Morgan Stanley and Citi are highlighting REITs from two sectors that they say can outperform the broader market, and remain resilient in a recession.

CNBC Pro subscribers can read more here.

– Weezin Tan

Ameriprise says this month’s Fed action could be “unlimited” for asset prices

The upcoming Federal Reserve meeting in September, when the central bank is expected to raise interest rates, will likely have already been set in the market, according to Ameriprise chief market analyst Anthony Saglimpin.

“From our point of view, this month’s central bank actions are likely to be inappropriate for asset prices,” he wrote in a note on Monday. “However, incoming economic data over the coming weeks and months and its impact on policy actions next year could play a more important role in shaping the direction of stocks in the medium term.. “

Markets are now expecting the Fed to raise rates by 0.75 percentage points, which means assets may not move much if that is the central bank’s decision. Tuesday’s CPI report in line with expectations may also not move the needle.”

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“Unless last month’s inflation numbers change significantly more than expected, including Wednesday’s update of August’s PPI, we believe a 75 basis point Fed hike is basically insured at this point,” he said.

– Carmen Renick

Wells Fargo says relief recovery likely to rebound bear market

The recent rally in stocks is likely to be another bear market bounce and investors should prepare for more volatility ahead, according to Wells Fargo.

“Public execution history, defensive outperformance, high shareholder payouts, high-quality, low-value stocks remind investors of the hallmark of a bear market,” Zhao Ma, a global portfolio and investment strategist, wrote in a note Monday.

They added that such recoveries occur in almost every bear market and many of them reverse quickly, leaving investors with regret.

“Although a bear market bottom is difficult to anticipate, in the past, market bottoms were usually preconditioned by excessively pessimistic market sentiment and a sign of eventual improvement in the underlying economic or market issue,” Ma said. “We think we’re not there yet in either respect.”

In the meantime, Ma recommends investors look for defensive stocks with low volatility, high earnings and share repurchase returns. He also says that investors should look for high-quality names with profitability, leading market share, and reasonable market prices.

– Carmen Renick

US stock futures rose ahead of Tuesday’s CPI report

US stock futures rose on Monday night as Wall Street looked ahead to the August CPI report due to be released on Tuesday morning. The report will give investors an update on the inflation situation in the US and is one of the last data the Federal Reserve will see before its September meeting.

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Dow Jones Industrial Average futures rose 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures rose 0.18% and 0.21%, respectively.

– Carmen Renick