After Dow’s Record Close, Stock Futures Lower

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Stock futures slightly lower after Dow’s record close (0:30), home sales falling (2:19), and Abercrombie & Fitch partner with the NFL (3:10).

The following is an abridged transcript:

Stock index futures were slightly lower on Monday, after the Dow notched a record close on Friday following Federal Reserve Chair Jerome Powell’s remarks at Jackson Hole.

S&P 500 futures (SPX) -0.1%, Nasdaq 100 futures (US100:IND) -0.1%, and Dow futures (INDU) -0.1%.

The 10-year Treasury yield (US10Y) was flat at 4.27%. The 2-year yield (US2Y) rose 1 basis point to 3.72%.

“Powell’s speech at Jackson Hole last week was classic Powell. That is not a terribly good thing. Powell signaled an increased probability of a September rate cut to counter the damage of trade taxes on the U.S. economy,” UBS’ Paul Donovan said.

Markets liked that. But this was essentially the “data dependent” mantra padded with additional rhetoric, Donovan added.

“Markets ended last week in a buoyant mood as a dovish tilt by Powell at Jackson Hole left investors increasingly confident on upcoming Fed easing. While Fed news will continue to draw attention this week, the focus will also shift to a slew of inflation releases,” Deutsche Bank’s Peter Sidorov said.

Investors will also keep their eye on the Nvidia (NVDA) results slated to come on Wednesday after the market close.

“Finally, the big event in corporate earnings will be Nvidia’s results, which come as tech stocks had seen their biggest five-day pullback since April prior to Friday’s rally,” Sidorov added.

The July PCE price index will come in on Friday.

Home purchases are getting canceled at the highest rate in years as high prices, elevated mortgage rates and economic uncertainty deter buyers, according to Redfin’s analysis of MLS pending-sales data.

Around 58,000 U.S. home-purchase agreements were canceled in July, or 15.3% of homes that went under contract last month. That’s up 14.5% Y/Y and marks the highest July rate in records dating back to 2017, according to Redfin.

Cancellations of home-purchase agreements were the most common in Texas and Florida. Among metros analyzed by Redfin, San Antonio saw the most cancellations in July, followed by Fort Lauderdale and Jacksonville.

Florida and Texas have been building more homes than other states, prompting some buyers to back out of agreements when they feel they can find a better deal elsewhere. Some buyers in Florida have also backed out due to increasing natural disasters, and soaring insurance and HOA fees.

Redfin noted that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in July could have gone under contract in June.

But there could be a shift in the tide as mortgage rates have slowly dipped, averaging 6.58% last week from 6.75% in mid-July, and expectations of the Federal Reserve cutting interest rates soon have risen. Supply is also ticking down, which could increase buyer urgency, Redfin said.

Abercrombie & Fitch (NYSE:ANF) announced on Monday a multi-year partnership with The National Football League that makes the retailer the league’s first Official NFL Fashion Partner. Men’s and women’s apparel, including hoodies, sweatshirts, t-shirts, outerwear, and accessories representing all 32 NFL teams, is now available in select Abercrombie stores and online.

Building on the success since launching licensed NFL products in 2022, Abercrombie & Fitch (NYSE:ANF) said its aim is to redefine fan style through a fashion-first lens in partnership with the NFL.

Abercrombie & Fitch (ANF) CEO Fran Horowitz said the company is uniquely positioned for this moment where sports, fashion, and culture are converging like never before.

“By pairing athlete-led campaigns and player-designed apparel with a lifestyle assortment, Abercrombie will help blur the line between outfits worn during game day arrivals and everyday wear for both female and male fans as well as for players. In addition, Abercrombie will activate across NFL tentpole events, including select NFL international games and within its retail locations worldwide,” highlighted the company.

Shares of Abercrombie & Fitch (ANF) were up 0.6% in premarket trading. The mall stock is down 34.1% on a year-to-date basis.