A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, October 11, 2022.
Brendan McDermid | Reuters
Here are the most important news items that investors need to start their trading day:
1. How do you follow that?
The stage was set for a meltdown Thursday. The consumer price index came in hot, indicating that inflation was not slowing down, despite the Federal Reserve’s recent rate hikes. Stocks plummeted at the beginning of the trading day, falling to their lowest levels since 2020. But then a funny thing happened. The markets reversed course in a stunning manner. The Dow closed over 800 points higher while the S&P 500 and Nasdaq jumped by more than 2% each. The S&P broke a six-day losing streak. It’s just one day, though, and the Fed is set to keep raising rates as long as prices keep surging. Earnings season is kicking in, as well, and that could bring more surprises for investors. (More on that below.) Read live market updates here.
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2. Here come the banks
JPMorgan Chase & Co. President and CEO Jamie Dimon testifies during a U.S. House Financial Services Committee hearing titled “Holding Megabanks Accountable: Oversight of America’s Largest Consumer Facing Banks” on Capitol Hill in Washington, September 21, 2022.
Elizabeth Frantz | Reuters
JPMorgan Chase and Wells Fargo are the first big banks to report earnings this season. JPMorgan posted profit and revenue above analysts’ expectations, as its results were driven in part by gains from interest income. JPMorgan CEO Jamie Dimon acknowledged strengths in the economy, but also had a warning: “There are significant headwinds immediately in front of us – stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine, which is increasing all geopolitical risks, and the fragile state of oil supply and prices.” Morgan Stanley also reported this morning.
3. Attention shoppers
Customers leave an Albertsons grocery store with their purchases in Burbank, California, July 17, 2012.
Fred Prouser | Reuters
It’s a massive supermarket deal, but not the buy one, get one free kind. Kroger agreed to buy rival Albertsons for about $24.6 billion. The merger will likely face sharp regulatory scrutiny, as both companies employ a combined 710,000 people. Their market footprints throughout the country – comprising about 5,000 stores – also share significant overlap. It’s a dynamic moment for the grocery industry. The business typically has tight profit margins, and shoppers, stores and suppliers alike are contending with surging inflation.
4. Netflix unveils ad tier
Mario Tama | Getty Images News | Getty Images
Netflix‘s new advertising-supported tier, which rolls out next month in the United States, will cost viewers $6.99 a month. While the company telegraphed the move months ago, when it became clear that Netflix was hemorrhaging subscribers, it still marks a huge shift for a business that resisted putting ads on its programming for years. So it makes sense that Netflix would price this new tier lower than some of its biggest competitors as consumers contend with higher food and energy bills because of inflation. Netflix with ads will be a dollar less than what Hulu charges now for its ad tier and what ad-supported Disney+ will charge in December. HBO Max’s ad service is $9.99 a month.
5. NFL vs. Apple
Los Angeles Chargers tight end Gerald Everett (7) during a 26-yard reception in the fourth quarter of an NFL game between the Los Angeles Chargers and Kansas City Chiefs on September 15, 2022 at GEHA Field at Arrowhead Stadium in Kansas City, MO.
Scott Winters | Icon Sportswire | Getty Images
NFL Sunday Ticket, which allows football fans to watch out-of-market games, is the last major broadcasting package up for grabs. For a while, it looked like Apple was the favorite to land the package, which has belonged to DirecTV for years and years. But, as CNBC’s Alex Sherman reports, talks between the tech giant and the league have hit some obstacles. The NFL is used to doing things its way, which has meant keeping exclusivity for local markets with games featuring hometown teams. But Apple isn’t interested in the same old, same old. It wants to be a full-fledged partner with leagues. Its deal with Major League Soccer provides clues to what that means, including that it allows Apple to stream every MLS game, even as networks can buy rights to simulcast them. NFL Commissioner Roger Goodell has said the league hopes to reach a Sunday Ticket deal by fall of this year. That gives him about 10 more weeks to meet his deadline.
– CNBC’s Tanaya Macheel, Melissa Repko, David Faber, Hugh Son, Yun Li and Alex Sherman contributed to this report.