August 8, 2023
Futures are down this morning this morning as fresh worries about China’s economic rebound and the state of U.S. banks weighed on sentiment.
Moody’s Investors Service lowered credit ratings by one notch for 10 small and midsize U.S. banks late Monday and indicated the possibility of downgrading major lenders, including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp. The agency cautioned that the credit strength of the sector might face challenges due to funding risks and weaker profitability. “Many banks’ second-quarter results showed growing profitability pressures that will reduce their ability to generate internal capital,” Moody’s said in a note.
China’s imports and exports fell much faster than expected in July, data on Tuesday showed, with imports down 12.4% year-on-year, missing a forecast fall of 5% in a Reuters poll and off a 6.8% decline in June.
Meanwhile, a surprise 40% levy on banks’ extra profits imposed by the Italian government also weighed.
WTI crude futures fell to $81 per barrel. Gold held below $1,940 an ounce while government bond yields around the world retreated, with the US 10-year Treasury note yield falling below 4%, the lowest in near a week, as concerns about the banking sector re-emerged.
On the earnings front, major companies like Eli Lilly (LLY), United Parcel Service (UPS), Zoetis Inc (ZTS), and Duke Energy (DUK) are slated to release their quarterly results today.
Have a great day!
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