Fed’s James Bullard says what’s more important is moving in the right direction on inflation
St. Louis Fed President James Bullard said what’s more important is moving in the right direction on 2% inflation.
“I mean with an eight handle on CPI, I think we’d be happy now to get going in the right direction. There will be a debate at some point about how long do you want to linger above 2%, and what do you have to do to get it down and actually hit the target. And I think that’s important debate, but that’s out there in the future,” he told CNBC’s Steve Liesman at Jackson Hole, Wyoming.
“[Right now], it’s getting and moving in the right direction. Let’s get it toward 2%,” he said.
Bullard said that Wall Street should hold a baseline expectation that inflation could be “higher for longer,” a risk the Fed official said is “underpriced in markets today.”
— Sarah Min
Santoli’s market notes
Here are some of today’s market notes from CNBC’s Michael Santoli:
- The tape continues to act as if there’s no dangerous gulf between the market’s current view of the Federal Reserve’s likely policy path and central bank officials’ own messaging as the Jackson Hole conclave gets underway.
- The equity market has made some peace for the moment with 2-year Treasury yields back near 3.4%, the 10-year above 3.05%, the U.S. Dollar Index just under two-decade highs and crude back in the mid-$90s. It helps that all of them have eased back from once-threatening levels this morning.
- S&P 500 has bobbed back up to that 20-day average and near the 4,170 area of the early-June highs which bulls were hoping would support things until Monday’s drop. No serious damage was done in this multi-day pullback following a 19% low-to-high ramp (using intraday prices).
Morgan Stanley’s top picks for the next year
CNBC Pro: These undervalued midcap stocks could have strong earnings growth ahead
As investors continue to ride out market volatility, some participants are increasingly turning to a growth at a reasonable price strategy — GARP — which offers investors the best of value and growth investing styles.
CNBC Pro screened for mid-cap stocks that meet the GARP criteria, and found some interesting names that made the cut.
Read the full CNBC Pro story here.
— Sarah Min
Travel stocks rise
Travel stocks rose on Thursday, with shares of cruise companies Royal Caribbean, Carnival and Norwegian Cruise Line jumping more than 4% each. Airline stocks United, Delta and American gained 1.7%, 1.4% and 2.7%, respectively.
Casino stocks Wynn Resorts and Las Vegas Sands rose more than 2%, while hotel giants Hilton and Marriott added 1% each.
— Samantha Subin
Three stocks making the biggest moves midday
Salesforce signage outside office building in New York.
Scott Mlyn | CNBC
Here are three stocks making headlines in midday trading:
Snowflake – Shares surged 20% after the cloud data platform provider surpassed revenue expectations in its most recent quarter. Snowflake said product revenue grew 83% year over year.
Salesforce — The stock fell about 5.6% after Salesforce issued disappointing guidance for fiscal 2023. Still, the software company beat earnings and revenue expectations, and approved a $10 billion stock buyback program, a first for the company.
Dollar Tree — Shares plunged 10% after the discount retailer cut its full-year forecast. Dollar Tree reported an earnings beat and a revenue miss.
Check out more midday movers here.
— Michelle Fox, Sarah Min
Dollar Tree struggles, Dollar General bet on food pays off
All dollar stores are not created equal. Look at what’s happening between Dollar General and Dollar Tree if you want proof.
Both dollar stores beat earnings forecasts, but what’s important lies within the retailers’ outlooks.
Dollar General raised its same-store sales guidance for the fiscal year and it’s now above Wall Street’s expectations. Meanwhile, Dollar Tree gave fiscal third-quarter revenue forecast that was a bit below consensus and issued an earnings estimate that was way below Street expectations.
Dollar General said it’s seeing plenty of customers visiting its stores to buy food and groceries.
CNBC Pro subscribers can read the full story here.
—Robert Hum
It doesn’t matter what the Fed will say if inflation is entrenched, Aureus’ Karen Firestone says
It doesn’t matter what the Federal Reserve says out of its Jackson Hole symposium if Wall Street gets the sense that inflation isn’t coming down, according to Aureus Asset Management’s Karen Firestone.
“If we get a real sense that inflation is entrenched, and we’re at 9% inflation or something like that, no one is happy about that,” Firestone said Thursday on CNBC’s “Halftime Report.” “It doesn’t matter what [the Fed will] say — 50, 75, 100 — that level of inflation is not good for stocks, particularly growth stocks.”
The investor is hoping for more inflation data will show the central bank’s action are having an impact on rising prices.
“We need some evidence. Otherwise, we’re gonna have inflation that’s too high for too long and that is not good for the stock market,” Firestone said.
— Sarah Min
Post-SPAC names enjoy run-up over the last 30 days, but are slumping year to date
SPACs have enjoyed a bounce over the last 30 days, but they are still far in the hole for 2022.
CNBC’s Post SPAC Index, made up of SPACs that have successfully merged and debuted on the public markets, is up 10.6% over the period between July 26 and Aug. 25. In that period, it beat the S&P 500, which is up 5.36%.
Sharp jumps in a handful of names have helped lift the index. Getty Images, for instance, is up over 217% in the last 30 days, while EV battery maker Enovix has added more than 136%.
Nevertheless, SPACs as a whole have suffered in 2022, as investors have shied away from speculative companies with little earnings. The CNBC Post SPAC index is off nearly 46% for the year, compared to the S&P 500’s roughly 12.6% decline.
SPACs, or special purpose acquisition companies, raise funding through an initial public offering and then use the proceeds to buy a private company and have it debut within two years.
SPAC liquidations have picked up as companies approach the two-year mark and have struggled to bring companies to market in these less than favorable conditions: Fifteen SPACs have liquidated year to date – five of which happened in August. Meanwhile, there was one liquidation in 2021 and two in 2020, according to SPACResearch.
–Darla Mercado, Gina Francolla
Snowflake surges 20% on revenue beat
Snowflake’s stock jumped more than 20% after topping revenue estimates in the recent quarter. The cloud data platform provider posted revenues of $497 million, beating Refinitiv estimates of $467 million.
Snowflake said product revenue grew 83% year over year and noted it expects that segment to bring in between $500 and $505 million in the third quarter. For the full year, the company expects product revenue of $1.91 billion to $1.92 billion.
— Samantha Subin, Ashley Capoot
S&P 500 opens higher
The S&P 500 opened higher Thursday. Dow Jones Industrial Average fell 68 points, or 0.21%, shortly after the bell. S&P 500 and Nasdaq Composite climbed 0.25% and 0.54%, respectively.
— Sarah Min
Jobless claims fall
Initial filings for unemployment benefits fell last week, the Labor Department said Thursday.
Jobless claims came in 243,000 for the week ended Aug. 20, down 2,000 from the prior week. It was also lower than consensus estimates of 255,000, according to StreetAccount.
— Sarah Min
Revisions show a smaller GDP decline in the second quarter
The first revision for second-quarter GDP painted a slightly less dour picture for the U.S. economy.
The Bureau of Economic Analysis said on Thursday that GDP contracted by 0.6% in the second quarter. The advance estimate released last month showed a decline of 0.9%.
There was a negative revision elsewhere in the report. The price index for gross domestic purchases grew 8.4% during the quarter. The previous estimate showed a rise of 8.2%.
Despite the high inflation and the negative GDP growth, real gross domestic income rose by 1.4% in the second quarter.
—Jesse Pound
Consumer confidence recovers somewhat, but recession concerns remain, Bank of America says
Consumer confidence has eased somewhat from their lows earlier this year, but recession concerns remain, according to Bank of America.
The BofA US Consumer Confidence Indicator reached a three-month high of 31% as of August 21, following a period of lower gas prices and better-than-expected economic data, according to a Thursday note.
Still, the firm said a majority of respondents, 66%, expect higher inflation over the next year, with 38% of those respondents anticipating a recession.
Respondents in higher income brackets earning more than $50,000 a year said they were mainly concerned about savings and investments in a downturn.
Meanwhile, those with lower incomes said they were more concerned with job security than their higher-income counterparts, though savings were still their main concern, the report said.
— Sarah Min
Fed’s George says demand is ‘cooling’
Kansas City Fed President Esther George told CNBC’s Steve Liesman that “demand is cooling” in the U.S. economy but that what she is hearing from business leaders is not yet consistent with recession.
George also said that inflation remains “broad based” and wants to see at least three “consistent months” of improving inflation data.
George declined to say whether see was leaning toward a half-point or three-quarter-point hike at next week’s Fed meeting. She did say that unemployment may have to rise for the Fed to bring down inflation.
—Jesse Pound
Peloton shares plunge after earnings miss
Shares of Peloton tumbled more than 15% in Thursday premarket trading after the equipment maker reported a big loss. The results marks six straight quarters of reported…
Read More: S&P 500 rises as Wall Street seeks cues from the Federal Reserve at Jackson Hole