- Arm is going public on the Nasdaq.
- Higher gas prices led inflation up.
- Citigroup and Google are cutting jobs.
Here are the most important news items that investors need to start their trading day:
1. All mixed up
Investors will be watching for another inflation report Thursday. The August reading of the producer price index comes on the heels of a hotter-than-expected consumer price index report. The market reaction to the CPI report was mixed. The Dow lost 0.20%, dragged down by 3M, which lost 5.7%. Meanwhile, the S&P 500 rose 0.12% and the Nasdaq Composite added 0.29%. The August PPI release on Thursday is expected to show prices have risen 0.4%, according to economists polled by Dow Jones. Follow live market updates.
2. What’s leading inflation?
Consumers are facing higher prices on gas and housing. The August consumer price index report — released by the U.S. Department of Labor on Wednesday — showed that inflation posted its biggest monthly increase this year. CPI, which measures costs across a broad array of goods and services, rose a seasonally adjusted 0.6% for the month and was up 3.7% from a year ago, according to the labor department. Core CPI — which excludes food and energy costs and is the number Fed officials focus on — increased 0.3% for the month and 4.3% from a year ago, compared with analyst estimates for 0.2% and 4.3%, respectively. Economists said higher gas prices, while notable, should be temporary.
3. Arm time
It’s time for one of the biggest initial public offerings of the year. Arm is going public Thursday in a long-awaited debut on the Nasdaq. The chip designer’s IPO was priced at $51 a share, the top of its expected range of $47 to $51 per share. That puts its fully diluted market cap, which includes outstanding restricted stock units, at more than $54 billion. Arm provides chip designs to tech giants including Apple, Google, Nvidia, Samsung, AMD, Intel and Taiwan Semiconductor Manufacturing Company, and many of them said they will buy shares as part of the offering.
Citigroup CEO Jane Fraser announced Wednesday that the bank would undergo a reorganization. Fraser said Citigroup would be divided into five main business lines that report directly to her, a move she said will cut down management layers and speed up decisions. Jobs will also be cut as part of the changes, but Citigroup is still deciding how many people will be laid off. Citigroup is the third-largest bank in the U.S. by assets but has struggled to rebound in the post-2008 financial crisis era and has been dealing with a slumping stock price.
5. Recruiting hit
Google is cutting hundreds of jobs from its recruiting organization as part of a bigger pullback in hiring that’s set to take place over the next several quarters. The move comes after Alphabet-owned Google announced in January that it was getting rid of 12,000 jobs, or roughly 6% of the full-time workforce. “It’s not something that was an easy decision to make, and it definitely isn’t a conversation any of us wanted to have again this year,” Brian Ong, Google’s recruiting vice president, told employees in a Wednesday video meeting of which CNBC obtained a recording. “Given the base of hiring that we’ve received the next several quarters, it’s the right thing to do overall.”
— CNBC’s Sarah Min, Brian Evans, Jeff Cox, Greg Iacurci, Leslie Picker, Kif Leswing, Hugh Son and Jennifer Elias contributed to this report.
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