Market Morning: Apple Phones Home, Inflation On Tap, Saudis Borrow Billions, Brexiteers Discuss Mutiny

Market Morning

Apple To Unveil Yet Another iPhone

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Technology never sleeps, and the iPhone doesn’t let you sleep either, if you don’t put it on Do Not Disturb as all of your social media accounts ping at you through the night. Apple (NASDAQ:AAPL), meanwhile, is expected to unveil a new series of the iPhone X. Will it include 3D mapping, artificial intelligence, augmented reality, the meaning of the universe? Probably all of that and more, if expectations are anything to go by. Rumor has it, it can also be used to talk to people, anywhere in the world, just by dialing a phone number. Apple is on the verge of breaking $1.1 trillion in market cap, meaning that if Apple had funded the entire TARP bailout program, it would still be valued at about $400 billion.

PPI, CPI Inflation Indicators On Tap Today, Thursday

Producer Price Inflation numbers will be released at 8:30am today, and Consumer Price Inflation at the same time tomorrow. PPI is expected to inch down to 3.2% from 3.3% last month, and CPI is expected to inch down to 2.8% from 2.9%. A lower than expected print could slow the rate of Federal Reserve rate hikes, and a higher than expected print could help ensure a December rate hike along with the expected September rate hike in  two weeks’ time. Commodities prices and the dollar index could make significant moves if any surprises are in store. Keep in mind that, with all the talk of trade wars, most of the tariffs that have been threatened by President Trump have not actually been implemented yet, so it may be a few more months until inflation data really climbs to the upside.


Saudi Arabia Taking Out $11 Billion Loan

Is the Royal Kingdom feeling a cash crunch? Now that the vaunted Aramco IPO isn’t happening, the Saudi Royal Family may be strapped for cash. It’s calling on its banking buddies at JPMorgan Chase (NYSE:JPM), HSBC (NYSE:HSBC), and Goldman Sachs (NYSE:GS) to pony up about $11 billion at 75 basis points over LIBOR, which means that if interest rates rise substantially, the Saudis could end up getting squeezed over time. A whole bunch of other banks are also participating in the loan, including banks that are strapped for cash themselves and are in serious risk of going under in the event of a sovereign debt crisis in Europe, such as BNP Paribas (OTCMKTS:BNPQY).

Brexiteers Meet to Discuss Ousting British PM May

A group of about 50 Brexiteers met this week to openly discuss the ousting of British Prime Minister Theresa May. The pro Brexit lawmakers disagree with May’s handling of the Brexit negotiations with the European Union, accusing her of trying to maintain The United Kingdom’s membership in the EU in all but name. The Tories would need a no-confidence motion to pass in order to oust the Prime Minister, which seems unlikely at this point even though her administration is considered week because the British Pound (NYSEARCA:FXB) would likely spiral in such an event and many would blame Brexit for the ensuing chaos. The Pound has already dropped nearly 40% against the dollar since before the financial crisis of 2008.

Asia Down, Europe Up, Hurricane Florence Bears Down on South Carolina

To wrap up the various market miscellany for today, Hong Kong hit new lows not seen since July 2017, Japan’s Nikkei is down another quarter percent, and China is also down another third of a percent in a continuing slump. European shares are trading higher today, with the commodity sector taking the lead, and commodities could feel an additional bump if Hurricane Florence, on the verge of being a category 5 hurricane, hits the US east coast head on. Gasoline futures usually rise on such an occasion, and are likely to do so again in the coming days.

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