Economy

5 Things to Know Before the Stock Market Opens on Wednesday, August 14

August 14, 2024
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Here are five key things investors should know to start their trading day:

1. Gathering time

Stocks rose on Tuesday, led by encouraging inflation news (more on that below). The Nasdaq Composite rose 2.43% and the S&P 500 gained 1.68%. Meanwhile, the Dow Jones Industrial Average ended the day up 408 points, or 1.04%. The S&P 500 has recovered some of its recent losses and is now less than 5% from its record high in July. In fact, all three major averages are back above their August 2 closing level, where they were before the global market selloff on August 5. Volatility has also eased since then, with the Chicago Board Options Exchange Volatility Index (VIX) hovering around 20 on Tuesday after rising above 65 last week. Follow live market updates.

2. Fresh drink

Starbucks replaces CEO Lakshman Narasimhan with Chipotle CEO Brian Niccol.

CNBC (left) | Getty Images (right)

Starbucks Shares got a boost on Tuesday, rising about 25% after the company announced that Chief Executive Lakshman Narasimhan would step down. Chipotle CEO Brian Niccol will take over the top job. It was the stock’s best day ever. Narasimhan, who became CEO in March 2023, is leaving the role effective immediately; Niccol will start on Sept. 9. The coffee giant has struggled this year with weak sales in the U.S. and China. Chipotle shares, meanwhile, fell more than 10% on news that Niccol is leaving after a successful tenure leading the burrito chain through a food-borne illness scandal and the pandemic.

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3. One down, one to go

Aldi supermarket in Alhambra, California, on June 27, 2024.

Eric Thayer | Bloomberg | Getty Images

the Producer price index data released Tuesday showed wholesale inflation rose less than expected in July. The core PPI reading, which excludes the volatile food and energy components, was flat. Dow Jones consensus estimates were for 0.2% increases for both readings. The headline PPI rose 2.2% on a year-over-year basis, a significant drop from June’s 2.7% reading. Investors will now turn their attention to the July CPI report, due out Wednesday at 8:30 a.m. ET. Economists surveyed by Dow Jones expect a similar 0.2% increase for all CPI items, as well as the core measure. A positive CPI reading could ease some of the pressure on the Federal Reserve and allow the central bank to focus on other economic challenges, such as the slowing labor market.

4. Gemini Season

Katarina Mogus takes a photo with the new Pixel phone during the Made By Google event at Google’s Bay View campus in Mountain View, California, on August 13, 2024. Google announced new Pixel phones, watches and artificial intelligence technology.

Josh Edelson | AFP | Getty Images

Google Google on Tuesday unveiled new artificial intelligence features that will use the company’s Gemini AI assistant and will be available on its Android devices. The tech giant also announced its latest line of Pixel phones. The Pixel 9 series, which starts at $799, will have a brighter display for viewing in direct sunlight, as well as more memory to support the AI ​​features. Google also announced the Pixel Watch 3, which has new features including AI-powered workout recommendations. Google, which doesn’t make much money from its hardware business, aims to showcase its new AI to consumers before Apple launches its own AI on iPhones, Macs and iPads later this year.

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5. Window of Opportunity

A home for sale is listed for sale on August 7, 2024 in San Rafael, CA.

Justin Sullivan | Getty Images

Mortgage rates have fallen dramatically in the past few weeks, and now homeowners are taking advantage. The Mortgage Bankers Association’s seasonally adjusted index showed that home refinance applications were up 35% last week, compared with the previous week. They were up 118% when compared with the same week a year ago. It took some time for homeowners to notice. Rates fell just one basis point last week, but they’ve fallen 33 basis points in the past four weeks and are 62 basis points lower than the same week a year ago. Refinances’ share of mortgage activity rose to 48.6% of total applications, up from 41.7% the previous week, as homebuyers continue to face high housing prices and low supply.

CNBC’s Brian Evans, Jesse Pound, Amelia Lucas, Rowan Goswami, Jeff Cox, Jennifer Elias and Diana Olek contributed to this report.

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