5 things to know before the stock market opens Friday, September 30
Traders on the floor of the NYSE, Sept. 28, 2022.
Here are the most important news items that investors need to start their trading day:
1. A bang, or a whimper?
The third quarter comes to a close Friday, and it couldn’t come any sooner for beaten-up stock markets. It’s been a terrible month for equities. The Federal Reserve’s policy makers made it clear they’re serious about raising rates until price increases cool down, sending bond yields surging and stocks down. The central bank’s critics say much of the turmoil is the result of the Fed waiting too long to address inflation and then doing too much, too quickly, to fight it. The economic mess in the UK and the nuclear-tinged anxiety over Russia’s war in Ukraine haven’t helped, either. Earnings season is around the corner, too, which could add even more pressure to markets that have already fallen below their previous 2022 lows. Follow live market updates here.
Read more: Euro zone inflation soars again
2. Not great, Apple
Apple CEO Tim Cook presents the new iPhone 14 at an Apple event at their headquarters in Cupertino, California, U.S. September 7, 2022.
Carlos Barria | Reuters
A somewhat surprising name led Thursday’s big selloff in tech stocks: Apple. While the top-tier gadget maker is down a whopping 20% so far this year, it has outperformed the tech-loaded Nasdaq, which has fallen an even-worse 31% since the end of 2021. Technology stocks are typically considered riskier and more vulnerable to interest rate increases, so when there’s volatility investors head to safer securities. In this case, it was a downgrade from Bank of America that triggered the decline in Apple, which brought other big names down with it, such as Alphabet and Microsoft. “Shares have outperformed significantly YTD … and have been perceived as a relative safe haven,” BofA analyst Wamsi Mohan wrote Thursday, in downgrading Apple to a hold. “However, we see risk to this outperformance over the next year, as we expect material negative est. revisions driven by weaker consumer demand.” Still, a vast majority of analysts on the Street have Apple at a buy rating.
Read more: Apple exec leaves company after vulgar comment goes viral on TikTok
3. Toyota CEO stands by EV plan
Akio Toyoda, president of Toyota Motor Corp., gestures while posing for photographs during a news conference at the company’s showroom in Tokyo, Japan, Dec. 14, 2021. Toyota announced plans for its EV vehicles.
Kiyoshi Ota | Bloomberg | Getty Images
Akio Toyoda has heard your complaints that his company, Toyota, isn’t moving fast enough to go all-in on electric vehicles, but he’s not budging. “That’s our strategy and we’re sticking to it,” the CEO said. While Ford and General Motors have been telling investors, customers and politicians alike that they’re going all-electric, Toyota is taking an all-of-the-above approach. That means producing gas-electric hybrids, like the Prius, as well as hydrogen-electric vehicles and plugins. The company has increased investments in electric vehicles, but it doesn’t view EVs as the only solution. “Everything is going to be up to the customers to decide,” Toyoda told reporters Thursday.
4. Nike has an inventory problem
A man wearing a protective face mask walks past a Nike brand store central in Kyiv, Ukraine December 10, 2020.
Valentyn Ogirenko | Reuters
It looks like people will be getting a lot of steeply marked-down Nike gear for holiday gifts this year. The sneaker and sporting goods company said in its earnings report Thursday that it’s overwhelmed with products from multiple seasons because of supply chain problems. Some shipments intended for earlier seasons showed up after taking too long, Nike said, while the company is also getting products for the holiday shopping season, which it ordered early to hedge against shipping delays. Overall, the company’s inventory jumped 44% in the prior quarter, and by 65% in North America, its largest market. So that’s left Nike with no choice but to “aggressively liquidate” big chunks of its inventory, said CFO Matthew Friend. Nike isn’t the only one in selling mode: Shares of the company fell in off-hours trading.
More from CNBC PRO: Nike results offer clues about the strong dollar and earnings season
5. Ian strengthens after pummeling Florida
A man takes photos of boats damaged by Hurricane Ian in Fort Myers, Florida, on September 29, 2022.
Giorgio Viera | AFP | Getty Images
Ian became a hurricane again after it barreled through Florida and hit the Atlantic Ocean. Now the storm is on a collision course with South Carolina, where it’s projected to make landfall Friday afternoon. Parts of the state could receive 8 inches of rain while suffering from severe flooding and winds, weather authorities said. Ian has already left a wide path of destruction in Florida, and knocked out powered to millions. President Joe Biden warned of a “substantial loss of life.” Images of Fort Myers, Florida, were particularly horrifying: Lingering floods, boats left on streets, houses smashed. “Watching the water from my condo in the heart of downtown, watching that water rise and just flood out all the stores on the first floor, it was heartbreaking,” Fort Myers Mayor Kevin Anderson told NBC’s “Today.”
– CNBC’s Alex Harring, Jordan Novet, Michael Wayland and Lillian Rizzo contributed to this report.
— Sign up now for the CNBC Investing Club to follow Jim Cramer’s every stock move. Follow the broader market action like a pro on CNBC Pro.