Wall Street Today | Banks Get Another Credit Downgrade and Stocks Drop

The 12-month Dec23/Dec24 spread in futures linked to SOFR has steepened sharply over the past couple of weeks as traders scale back rate-cut pricing for next year.

Similar sentiment has been seen in SOFR options, where traders have targeted downside protection for next year and beyond, taking positions that will gain as more rate cuts are priced out of the market.

Sales of previously owned US homes fell in July to the lowest level since the start of the year, constrained by a lack of inventory and higher borrowing costs.

Contract closings decreased 2.2% from a month earlier to a 4.07 million annualized pace, National Association of Realtors data showed Tuesday. The rate, which is close to the slowest since 2010, was weaker than nearly all estimates in a Bloomberg survey of economists.

A slump in market volatility has hit currency trading desks, squeezing banks’ margins, denting revenue and undermining the recovery from a plunge during the Covid-19 pandemic.

Foreign-exchange trading revenue fell 15% in the first half compared with a year earlier, according to figures from the top 100 banks collated by London-based BCG Expand Research. Without a second-half pickup, revenue could be heading for its second full-year decline in three years, after a drop in 2021.

Oil posted a modest decline amid signs that supplies are rebounding. West Texas Intermediate futures for October steadied below $80 a barrel as thin summer trading leaves the market struggling for direction.

Observed exports from Iran have surged to 2.2 million barrels a day this month, and Turkey and Iraq have held a sudden flurry of talks as they seek to restart a major oil pipeline.

Bank stocks turned south Tuesday after S&P Global downgraded its ratings on several U.S. banks, citing rising interest rates and large outflows of deposits.

The reasons behind the downgrades aren’t new and have been on investor minds since Silicon Valley Bank and Signature Bank collapsed earlier this year.

According to a filing with the Securities and Exchange Commission last week, AMC Entertainment said Thursday, Aug. 24, would be the last day of trading of AMC Preferred Equity units, also known as APES.

The company posted adjusted earnings of 26 cents a share, falling from the year-ago quarter but beating Wall Street's call for 14 cents a share. Sales were $5.13 billion, also sliding from the prior year but higher than the $5.07 billion analysts were expecting.

Lowe's posted a 1.6% decline in comparable sales for the fiscal second quarter compared with the 2.6% drop analysts expected.