Good morning. US stock futures dipped in Thursday morning trading as investors mulled over the direction of the Federal Reserve’s interest rate policy and whether another rate hike will likely occur.

"The sweet spot for any asset comes when value and momentum agree"

Antti Llmanen

Top News

EU lines up tech giants subject to new rules

WHAT: The European Union (EU) is making a list and checking it twice! They’ve confirmed the first six tech “gatekeepers” subject to new rules under the bloc’s Digital Markets Act (DMA). Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft have been identified as firms required to abide by the new rules.

WHY: The European Commission — the EU’s executive branch — stipulates that digital platforms can be designated as gatekeepers “if they provide an important gateway between businesses and consumers in relation to core platform services” The gatekeepers now have until March 2024 to make sure their services comply with DMA regulations.

Google settles over monopoly allegations

WHAT: Google’s never-ending list of lawsuits took a unique turn as 36 states and the District of Colombia struck a deal in principle to settle an app distribution monopoly case. The lawsuit, filed in 2021, accuses the tech giant of having monopoly control of app distribution for software that runs most of the world’s cellphones.

WHY: Google still faces several major antitrust lawsuits filed by the Department of Justice and other government agencies across the US focused on alleged search-related and advertising market monopolistic behavior.

Airlines brace for higher fuel costs

WHAT: United Airlines, Southwest and Alaska Air aren’t too pleased about the trajectory of oil prices. They’re sounding the alarm about higher jet fuel costs in the third quarter amid rising crude oil prices. Oil prices recently closed above their highest level since November 2022 on the back of sustained OPEC+ output cuts.

WHY: In the first half of the year, lower fuel costs were a tailwind for airlines as consumers shifted their spending from goods to experiences.

In Other News

Chinese agencies block iPhone usage

WHAT: Looks like Apple might become “collateral damage” in the ongoing trade dispute between the US and China. A recent report from the Wall Street Journal said employees at some government agencies received instructions via chat groups and meetings to stop bringing gadgets including iPhones into the office.

WHY: Apple enjoys widespread popularity in China, its largest international market, despite rising resentment of American efforts to contain the Asian country’s technology industry.

Fed report says price growth slowing, business costs still sticky

WHAT: According to the latest Federal Reserve Beige Book report, US businesses are facing a tricky tango when it comes to price and costs. The report revealed that businesses in several districts struggled to pass on higher costs to consumers last month as cost pressure grew faster than prices.

WHY: The Fed will hold its next policy meeting in late September when officials are expected to take a breather and hold rates steady in the range of 5.25%-5.5% to make sure inflation data continues to show cooling.

Ouch! Netflix gets the axe first…

WHAT: Americans seem to have a “love-hate” relationship with Netflix. According to a survey from Vorhaus Advisors, which included responses from 2000 people in the US over 18, among those who canceled a streaming service in the past three months, Netflix was the “most frequently mentioned” service.

WHY: Though Netflix has its challenges, there’s more than enough cord-cutting to go around right now. The data shows that 12% of paid TV subscribers are “very likely to cut the cord in the next year” and those who are most likely to do so are between the ages of 18 and 34.

Key Economic Events

• Thursday - Fed’s Williams Speaks, Fed’s Bowman Speaks

• Friday - Baker Hughes Oil Rig Count, Fed’s Barr Speaks

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