The June Consumer Price Index (CPI) is due to be released this morning and is expected to show inflation continuing to subside, raising investor hopes for a September rate cut by the Federal Reserve. Costco Wholesale (COST) shares are rising in premarket trading after the retailer raised membership fees for the first time since 2017 and saw sales soar in June. Apple (AAPL) resolved its “tap-and-go” payments investigation with the European Union, opening up its mobile wallet to competitors to avoid antitrust fines. Electric car maker Tesla (TSLA) shares are trending lower after closing with gains for the 11th consecutive trading day on Wednesday. Delta Air Lines (DAL) shares are falling after reporting a 29% year-over-year drop in second-quarter profits. U.S. stock futures are falling after the Nasdaq Composite and S&P 500 closed at record highs on Wednesday. Here’s what investors need to know today.
1. Consumer Price Index (CPI) is expected to show slowing inflation, strengthening expectations of Fed rate cuts
The Bureau of Labor Statistics’ Consumer Price Index report, due at 8:30 a.m. Eastern time this morning, is expected to show that the closely watched inflation measure rose 3.1% year over year, down from a 3.3% increase in May, according to a survey of economists conducted by the BLS. Dow Jones Newswires and The Wall Street Journal. If the report is as expected, it would confirm that inflation is trending downward again after a worrying rise in the first quarter. Federal Reserve officials have said they need to see inflation receding before cutting interest rates.
2. Costco responds to first membership fee increase since 2017
Costco Wholesale (COST) shares rose 3% in premarket trading after the company increased membership fees for the first time since 2017 and saw sales soar in June. Starting Sept. 1, membership fees will increase 8% to $65 for an individual membership and $130 for an executive membership. Costco also reported Wednesday that its June net sales rose 7.4% year over year to $24.48 billion, a sign that the company’s business model of offering a wide variety of products at low prices continues to appeal to consumers, even in an inflationary environment.
3. Apple settles App Store payments investigation with EU to avoid fines
Apple (AAPL) has resolved its “tap-and-go” payments investigation with the European Commission, the EU’s enforcement arm, and opened up its mobile wallet to competitors to avoid antitrust fines. “The Commission’s preliminary view is that Apple’s refusal has excluded Apple Pay rivals from the market, reducing innovation and choice for iPhone mobile wallet users,” the Commission said, noting that it had accepted Apple’s promise to allow rivals access to its payments technology.Last month, Apple was tentatively found to be in breach of Europe’s Digital Markets Act (DMA) by allegedly not allowing users to be “steered” away from the App Store to make payments and therefore not easily find better offers.Apple shares were little changed in pre-market trading.
4. Tesla falls after 11 consecutive sessions of gains
Tesla (TSLA) shares are trending lower in premarket trading after rising for 11 consecutive trading days on Wednesday after a Goldman Sachs analyst raised his price target for the electric vehicle maker. The stock, which has lagged among big tech stocks recently, has been rising since the days before the company reported second-quarter delivery numbers that beat analysts’ expectations. The recent gains have put Tesla shares back into positive territory for the year.
5. Delta Air Lines’ second-quarter profit falls nearly 30% as costs rise
Shares of Atlanta-based Delta Air Lines (DAL) fell 9% in premarket trading after the company reported second-quarter profit fell 29% from a year ago to $2.01 a share due to higher fuel costs and deep discounts. Delta Air Lines maintained its full-year adjusted earnings per share (EPS) guidance of $6 to $7 per share, but said it now expects third-quarter adjusted earnings to be below expectations, at $1.70 to $2 per share. The company has benefited from its focus on premium customers, and its shares have risen 16% this year.
