TRG Fast Facts

By TRG Advisors on August 16, 2024

Weekly data-driven insights on the markets and economy

1. Markets Up on Cooler Inflation

Inflation slowing to a 3-year low lifted equity markets this week, with the Dow rising more than 200 points, the S&P 500 inching up .24% and the Nasdaq lagging a bit, losing .18% Wednesday. The Producer Price Index came in slightly lower than expectations, and the Consumer Price Index came in exactly as expected. All three averages are now above their August 2 closing date, which was the session before the global market sell-off.[i]

2. Rate Cut Expectations Come Back to Earth

After the August 2jobs report had some traders calling for an emergency rate cut, and the odds of a 50-basis point cut jumped to an 85% likelihood at the September meeting, cooler heads have begun to prevail. For now, September market-implied odds of a single 25-basis point cut are just above 50%, and the 50-basis point cut is hovering around 47%.[ii]

3. Boeing Boasts Some Uplifting News

Squeaking out a win like USA’s basketball golds over France in the Olympics, Boeing secured 72 new plane deliveries in July over Airbus’s 59. However, the July order only created a total of 186 new net orders for the first seven months of 2024. That’s running well behind the 367 net orders that Airbus has reported so far this year. These reported deliveries are crucial for Boeing to attempt to return to profitability for the first time since 2019.[iii]

4. Starbucks Adds Chipotle Sizzle

Starbucks stock steamed 20% higher after naming Chipotle CEO Brian Niccol as its next Chairman and CEO. Last month, Starbucks reported another challenging quarter with same-store sales falling 3%, which was the second straight quarter of decline. Activist investor Elliott Investment Management called the changeup a “transformational step” in a release, sharing that he has been currently engaging with the Starbucks Board over the past two months.[iv]

5. “Going to the Mall” Going to Look Different

Macy’s stands to set off a wave of changes across the country as it plans to close roughly 150 of its stores by early 2027. The growth of online shopping and demographic shifts will pressure malls to evolve to changing consumer demands. These pressures have forced Macy’s to close more than a third of its namesake stores in the last 10 years. Replacements could convert these stores to Amazon warehouses, hockey rinks and apartments.[v]

6. Back-to-School Deal Shopping

Michaels tops the list as the most expensive store for school supplies, topping least expensive Walmart, which is nearly 3x the cost for the same products. Surprisingly, Amazon’s convenience could lead to higher prices of school items like crayons and rulers because of the shipping costs that Amazon embeds in those prices. Some words of wisdom are to continue to look at your stores for sales after purchase, as some stores may offer you the ability to get some of your money back.[vi]

[i] Evans, Brian and Pound, Jesse, “S&P 500 closes higher for fifth straight day as easing inflation bolsters rate cut hopes: Live updates,” CNBC, August 14, 2024, https://www.cnbc.com/2024/08/13/stock-market-today-live-updates.html. Accessed August 14, 2024.

[ii] Saul, Derek, “Only One Interest Rate Cut Expected By September – As Emergency Cut Potential Evaporates,” Forbes, August 12, 2024, https://www.forbes.com/sites/dereksaul/2024/08/12/only-one-interest-rate-cut-expected-by-september-as-emergency-cut-potential-evaporates/. Accessed August 14, 2024.

[iii] Isidore, Chris, “Boeing scores rare sales win over Airbus, despite ongoing safety issues,” Yahoo!Finanance, August 13, 2024, https://finance.yahoo.com/news/boeing-scores-rare-sales-win-150002883.html. Accessed August 14, 2024.

[iv] DiPalma, Brooke, “Starbucks names Chipotle CEO Brian Niccol as its next chairman and CEO,” Yahoo!Finance, August 13, 2024, https://finance.yahoo.com/news/starbucks-names-chipotle-ceo-brian-niccol-as-its-next-chairman-and-ceo-122032362.html. Accessed August 14, 2024.

[v] Repko, Melissa, “Apartments, hockey rinks and Amazon warehouses: Macy’s closures will set off a wave of change at shopping malls,” CNBC, August 12, 2024, https://www.cnbc.com/2024/08/12/macys-store-closures-will-change-malls.html. Accessed August 14, 2024.

[vi] Gibson, Kate, “Here are the most expensive and cheapest stores for school supplies,” CBS News, August 13, 2024, https://www.cbsnews.com/news/back-to-school-spending-supplies-cheapest-most-expensive/. Accessed August 14, 2024.