MARKET MOVERS
- OPEC oil output lags behind targets despite pledges to boost supplies. Output from the 10 OPEC members involved in the cartel’s plans to gradually raise production to pre-pandemic levels rose to 24.81 million barrels a day in June. That put it roughly 1.06 million barrels a day behind its agreed-upon quota for June of 25.87 million barrels a day. Read more here.
- Oil slumps nearly 7% as the U.S. benchmark slides back below $100 a barrel. Fears of a recession were weighing on stocks and commodities in Tuesday dealings, analysts said. Rising COVID-19 cases in Shanghai were also seen putting pressure on crude, stirring fears of renewed lockdown. A surging dollar, with the euro slumping toward parity with the U.S. currency, is also seen as a headwind for commodities prices. Read more here.
- Equinor buys US battery storage developer. Norwegian energy major Equinor ASA said Tuesday that it has signed an agreement to buy U.S.-based battery storage developer East Point Energy LLC. The acquisition will enable Equinor to further unlock the potential we see in the renewables space in the U.S., capturing value from volatility in the power markets and providing reliable services to the grid.
- Dividend payouts hit record despite the rocky stretch in markets. The companies in the S&P 500 paid out a record $140.6 billion in dividends in the most recent quarter, according to S&P Dow Jones Indices. That’s up from $137.6 billion in the first three months of the year and $123.4 billion in the same quarter last year. Payments this year are projected to grow at a faster pace than usual, as companies have logged strong sales.
- Amazon launches cancer vaccine clinical trial. Amazon is working with the Fred Hutchinson Cancer Research Center to develop cancer vaccines, according to a filing. Amazon is listed as a collaborator on a filing for an FDA-approved clinical trial, which seeks to develop personalized vaccines to treat breast and skin cancers. Read more here.
- Housing sales are down sharply year-over-year. We are seeing a significant change in inventory, and maybe a pickup in new listings. So far, most of the increase in inventory has been due to softer demand - likely because of higher mortgage rates. We are also seeing a sharp decline in closings in June, and this might be due to buyers canceling escrow because of the increase in mortgage rates.
- The office vacancy rate increased in Q2. Given the intriguing supply and demand dynamics, office vacancy trended up 30 bps and finished the 2nd quarter at 18.4%, merely 10 bps lower than its pandemic high in Q2 2021. On the rent front, both asking and effective rents edged up 0.4% during the quarter – these are the highest growth rates since the pandemic began.
WHAT TO WATCH
- Euro hits parity with the dollar. The Federal Reserve’s aggressive interest-rate increases this year have lifted the dollar. The dollar index, a measure of the greenback’s strength against a basket of six peers, is up 13% this year. The weakness of the euro is a boon for exporters in the region, but it isn’t helping the European Central Bank bring down inflation, which is running at a 40-year high. Read more here.
- Spotify to buy music-trivia game Heardle. Spotify said it views Heardle as not just a game, but also a song-discovery tool. The company said the daily trivia game has millions of users. In the game, players are tasked with guessing a song based on its opening notes, Spotify said. They get six guesses, with each hint giving a few more seconds of music to inform their next answer. The game is a musical variation of the hit game Wordle.
- Company downgrades are picking up steam as profit outlooks dim. Analysts are starting to get concerned their second-half estimates are too high and are beginning to adjust. Housing is facing softening sales. Metal/energy weakness continues. Individual commodity futures have also followed a similar pattern, peaking earlier this year and seeing significant downturns in the past month. Read more here.
