S&P 500 futures slip to start the week: Live updates

RBC expects investor sentiment to be more mixed as credit quality and spending trends normalize in the near-to-medium term, and student loan payments restart next month.

Amid this environment, the firm said it favors American Express due to its limited revenue reliance on late fees. 

“In this environment, we believe top-of-wallet players are best positioned to outperform,” analyst Jon Arfstrom wrote in a Tuesday note.

Shares of American Express gained 1% Wednesday premarket.

CNBC Pro subscribers can read more about his call here.

— Hakyung Kim

Check out some of the companies making headlines in premarket trading.

Oracle — The software stock added 1.8% in premarket trading following an upgrade to overweight from equal weight by Barclays. The firm said the company’s cloud business should feel tailwinds from artificial intelligence.

Brady Corporation — Shares climbed nearly 11% after the company reported quarterly results. Brady posted an adjusted $1.04 profit per share, while analysts polled by FactSet forecast 93 cents.

Warner Bros. Discovery — Shares dipped 1.4% after the company warned that strikes from writers and actors could negatively impact cash flow by a range of $300 million to $500 million.

Read the full list here.

— Brian Evans

Goldman Sachs encourages investors to buy shares of potato products maker Lamb Weston, anticipating a comeback for the stock after a difficult few months.

Analyst Adam Samuelson upgraded shares to buy from neutral.

“We see recent underperformance providing an attractive entry point,” Samuelson wrote in a Monday note. He added that the company’s stronger-than-expected fiscal fourth-quarter and 2024 fiscal year outlook suggest “a balance of risks skewed to the upside.” 

To read more about his upgrade, click here.

— Hakyung Kim

Goldman Sachs cut the odds of a recession in the U.S. to just 15% from 20% prior and said the Federal Reserve may keep rates the same when in it next meets on Sept. 19-20.

“We view Chair Powell’s promise at Jackson Hole to ‘proceed carefully’ as a signal that a September hike is off the table and the hurdle for a November hike is significant,” wrote Jan Hatzius, the bank’s chief economist in a note dated Monday.

CNBC PRO subscribers can read more about the bold Goldman calls here.

—John Melloy

Chip designer Arm filed an updated regulatory filing for a U.S. initial public offering, setting a range between $47 per share and $51 per share. SoftBank, which owns Arm, plans to sell 95.5 million shares. This all implies a valuation of up to $54.5 billion.

— Fred Imbert.

The market could be characterized by a somewhat counterintuitive trend in which seemingly positive news on the economy is interpreted on Wall Street as a negative for stocks, Goldman noted.

“‘Good news’ from growth has been ‘bad news’ for markets,” strategist Andrea Ferrario noted. “With fading recession risk, there is a risk that good news on growth might trigger more hawkish repricing of real rates if accompanied by stickier inflation.”

“This could ultimately weigh on risky assets, given risk premia are already low,” Ferrario noted.

— Fred Imbert, Michael Bloom

U.S. Treasury yields climbed on Tuesday as markets reopened after the Labor Day holiday and investors considered what could be next for the economy following last week’s key data releases, including the latest U.S. jobs report.

At 4 a.m. ET, the yield on the 10-year Treasury was up by over four basis points to 4.2163%. The 2-year Treasury yield was last at 4.8991% after having risen by more than three basis points.

Yields and prices move in opposite directions. One basis point equals 0.01%.

The Reserve Bank of Australia held its benchmark policy rate at 4.1%, extending its pause to three straight months.

RBA Governor Philip Lowe said in a statement that inflation in Australia has passed its peak and the inflation rate for July showed a further decline. “But inflation is still too high and will remain so for some time yet,” Lowe added.

He also noted that the Australian economy is experiencing a period of below-trend growth, “and this is expected to continue for a while.”

Despite this, Lowe did not give an indication for rate cuts, instead saying that some further tightening of monetary policy may be required, but that will continue to depend upon the data and the central bank’s assessment of risks.

— Lim Hui Jie

Chinese property developer Country Garden Holdings wired bond coupon payments that were due last month, Reuters reported, citing a source close to the company.

China’s largest private property developer failed to pay a $22.5 million coupon on two U.S. dollar bonds on Aug. 6, raising market fears of a default. Both payments had 30-day grace periods.

— Lim Hui Jie

China’s services sector recorded its slowest expansion since December 2022, according to a Caixin survey.

The Caixin purchasing managers index for August came in at 51.8, down from 54.1 in July.

The survey noted that this was amid a softer rise in overall new work, adding that “notably, new business from abroad fell for the first time in 2023 so far.”

Nevertheless, companies remained optimistic onthe 12-month outlook, and planned company expansions supported a further increase in employment across the sector, the report said.

— Lim Hui Jie

South Korea’s consumer price index climbed 3.4% year-on-year in August, the first rise recorded in the inflation rate since January.

The figure was sharply higher than the 2.3% gain in July and also higher than the 2.7% expected by economists polled by Reuters.

The consumer price index also rose by 1% month-on-month, higher than the 0.3% expected.

— Lim Hui Jie

UBS is sticking by its view of a “softish” landing for the U.S. economy, saying inflation is moving closer to the Federal Reserve’s target without a recession this year.

“August was a tough month for investors,” said Mark Haefele, global wealth management chief investment officer at UBS, noting that the S&P 500 ended last month down 1.6%. “Contradictory evidence and conflicting interpretations of economic data, asset pricing, and the outlook for Fed policy have buffeted asset prices in recent weeks as expectations of a soft landing for the US economy have ebbed and flowed.”

Some remaining uncertainties could still keep market on edge, Haefele said in the Monday note. Last month’s increase in core PCE came out well above the Fed’s target, which could sustain the possibility of another rate hike, the analyst said. UBS is also watching for a potential rebound in savings rates and further cooling in the labor market.

“Our base case view is that by the November FOMC meeting, the economy will have shown clear signs of slowing, leading the Fed to finally put an end to its sharpest rate hike cycle since the 1980s. We expect US Treasury yields to fall by year-end as both US economic growth and inflation moderate,” Haefele wrote.

— Pia Singh

Investors are preparing for what history says is the weakest month for markets.

In September, traders will weigh fresh data from economic reports, including the personal consumption expenditures price index, which is the Federal Reserve’s preferred inflation measure. Traders also await September’s two-day Fed meeting, during which central bank policymakers will announce their interest rate decision Sept. 20.

CNBC Pro subscribers can read more here about what to expect in the week ahead.

— Pia Singh, Sarah Min