Good morning. US stock futures dipped in Thursday morning trading as traders continue to assess the fallout from Fitch’s recent downgrade of the United States long-term rating.

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Top News

US Treasury Secretary: Ratings downgrade unwarranted

WHAT: US Treasury Secretary Janet Yellen isn’t taking Fitch’s ratings downgrade lying down! She’s firing back at the ratings agency, calling their decision “entirely unwarranted”. Speaking in Washington, Yellen said the ratings announcement failed to account for the resilience of the US economy, low unemployment, falling inflation and continued growth and innovation.

WHY: “At the end of the day, Fitch’s decision doesn’t change what all of us already know: that Treasury securities remain the world’s preeminent and safe liquid asset, and that the American economy is fundamentally strong” Yellen added.

Biden holds off on restocking US oil reserves

WHAT: With oil prices soaring above $80 a barrel, the Biden Administration has canceled plans to restock the US’ emergency oil reserves. The Energy Department canceled a purchase of 6 million barrels for the strategic reserve, stating it is trying to secure a good deal for taxpayers.

WHY: Biden’s drawdown brought the reserves to about half its approximately 700 million barrel capacity as he sought to tame high gasoline prices in the aftermath of Russia’s invasion of Ukraine.

BofA scraps recession forecast

WHAT: Bank of America just did a double-take on their recession forecast — no more doom and gloom for the US economy according to the bank’s panel of economists. The change comes just a week after Federal Reserve Chairman Jerome Powell said the central bank’s own economists are no longer forecasting a recession.

WHY: “Growth in economic activity over the past three quarters has averaged 2.3%, the unemployment rate has remained near all-time lows, and wage and price pressures are moving in the right direction, albeit gradually” the economists wrote.

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In Other News

Apple rakes in customer deposits with high-yield account

WHAT: Apple is rolling full steam ahead in the finance space! Since its April debut, the company’s high-yield savings account — a partnership in conjunction with Goldman Sachs — has brought in $10 billion in customer deposits the company said. The deposit account lets Apple Card users earn an annual percentage yield of 4.5% on savings accounts.

WHY: In March, Apple also launched its “buy now, pay later” service in the United States, further expanding its footprint in the financial technology space.

Amazon expands Fresh access

WHAT: Amazon is opening the online doors to its Fresh store for non-Prime members. According to reports from Bloomberg, the company will allow customers in a dozen major US cities to place orders online from Amazon Fresh stores and warehouses. Before this change, Amazon only let those who pay its $139 per year Prime membership to order groceries online.

WHY: In the aftermath of the Covid-19 pandemic, Amazon has been pulling back on its physical stores. Last year, the company shuttered all 68 of its Amazon Books, Amazon 4-Star and Amazon Pop Up locations across the US and UK.

China sets cellphone limits for kids

WHAT: China’s cyberspace regulator just announced a new rule that might leave some tech companies feeling dizzy. The Cyberspace Administration of China says it wants to limit children under the age of 18 to two hours maximum of smartphone usage per day. It also added that it wanted providers of smart devices to introduce programs that would restrict internet access between the hours of 10 p.m. and 6 a.m. for children under 18.

WHY: Chinese authorities in recent years have grown increasingly concerned about rates of myopia and cellphone addiction among young people.

Key Economic Events

• Thursday - Initial Jobless Claims (wk end Jul-29)

• Friday - Unemployment Rate (Jul)

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