Market 09/12: Money flow rotating from tech, oil prices rise after production cut report

Light rotation from technology to financials and energy

Market opens Tuesday's trading session in a weak liquidity environment similar to yesterday's session, however with more stable money flow allocation instead of focusing solely on big tech stocks.

August business optimism index dips slightly, inflation only the 2nd concern for business owners.

Small business NFIB optimism index fell to 91.3 in August, below the 91.5 estimate and slightly down from 91.9 last month. Optimism about business conditions (orange line) reverses to decline after several months of strong gains.

Key takeaway from August NFIB: labor quality is the biggest problem for small businesses. Inflation concerns also rose but still rank #2.

23% of small business owners say inflation is their most important business problem, up 2% from last month.
24% of businesses say they are most worried about labor quality.

Deposit outflows at US banks continue at alarming levels

Last week, US banks witnessed the largest deposit withdrawal since the SVB collapse. Total bank deposits fell $70 billion in just the previous week, bringing total deposits across the entire banking system to the lowest level in the past 4 months.

At the same time, the Fed's emergency bank funding facility reached a record high of $108 billion.

Market prices 93% chance Fed holds rates steady

While 93% of traders price in the Fed pausing rate hikes at the September meeting, holding or hiking rates in the future remains uncertain. According to CME FedWatch, expectations for a Fed rate hike at the November meeting have risen to about 43%.

Global oil market faces supply shortage of over 3 million barrels/day

The global oil market will face a shortage of over 3 million barrels/day next quarter as Saudi Arabia decides to continue production cuts. This could be the largest deficit in over a decade.

According to the report, 13 OPEC members pumped an average of 27.4 million barrels/day this quarter, about 1.8 million barrels less than what consumers need. WTI surges above $88 following this news, highest since November 2022.

Germany's ZEW economic sentiment index hits 3-year low

Germany's September ZEW economic sentiment index hits -79.4, down from -71.3 last month. Lowest since August 2020!

Excluding the pandemic period, it's the lowest since July 2009!

UK unemployment hits 2-year high

The UK unemployment and jobseeker rate rose to 4.3% in the 3 months to July, highest since Sep/2021. Average earnings excluding bonuses up 7.8% YoY.

BoE's efforts to cool the economy are working to ease pressures from the cost-of-living crisis, with overall wage growth exceeding inflation for the first time since March 2022.

Business results updates:

Oracle issues earnings guidance below expectations

• Revenue +9% Y/Y to $12.5B (below expectations $20M).
• Non-GAAP EPS $1.19 (above expectations $0.04).
• Dividend $0.40/share (unchanged).
• Cloud revenue +30% Y/Y to $4.6B:
• SaaS +17% Y/Y to $3.1B.
• IaaS +66% Y/Y to $1.5B.

Q2 revenue growth forecast of 5% to 7%, below analysts' average estimate of 8.2%, causing its stock to plunge -11.7% pre-market.

Other news

Apple launches iPhone 15

Apple's new product launch event titled "Wonderlust" takes place at 10am on 12/9 Pacific Time. The event is still held at Steve Jobs Theater, Apple Park campus, California.

As every year, the most anticipated product at the event is the new generation iPhone - iPhone 15. According to leaked information, in this launch, Apple will introduce 4 new iPhone models including: iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max.

Some market analysts say the iPhone 15 Pro will go on sale at 1,099 USD, up 100 USD from the iPhone 14 Pro, while the iPhone 15 Pro Max increases by 200 USD, reaching 1,299 USD for the standard version. The price change mainly comes from the frame material and camera technology.

Some sources say it's not ruled out that Apple will launch an all-new iPhone 15 Ultra version. This would be Apple's "secret weapon" kept until the last minute or it could simply be a new name for the iPhone 15 Pro Max version.

North Korean leader Kim Jong-un visits Russia

According to North Korean state media, Mr. Kim Jong-un left Pyongyang for Russia on his private train on 10-9, accompanied by top military officials, weapons industry leaders, and the Foreign Minister.

U.S. officials, who first revealed the visit, said that arms negotiations between Russia and North Korea are progressing positively. Previously, Pyongyang and Moscow denied that North Korea would supply weapons to Russia.

Washington and its allies have expressed concern over recent signs of closer military cooperation between Russia and North Korea.