Magnificent News: 5 things to know before the stock market opens Friday

Sept. 30, 2022

MORNING SQUAWK

1. A bang, or a whimper?

The third quarter comes to a close Friday, and it couldn't come any sooner for beaten-up stock markets. It's been a terrible month for equities. The Federal Reserve's policy makers made it clear they're serious about raising rates until price increases cool down, sending bond yields surging. The central bank's critics say much of the turmoil is the result of the Fed waiting too long to address inflation and then doing too much, too quickly to fight it. The economic mess in the UK and the nuclear-tinged anxiety over Russia's war in Ukraine haven't helped, either. Earnings season is around the corner, too, which could add even more pressure to markets that have already fallen below their previous 2022 lows. Follow live market updates here.

Read more: Euro zone inflation soars again

2. Apple leads selloff

A somewhat surprising name led Thursday's big selloff in tech stocks: Apple. While the top-tier gadget maker is down a whopping 20% so far this year, it has outperformed the tech-loaded Nasdaq, which has fallen an even-worse 31% since the end of 2021. Technology stocks are typically considered riskier and more vulnerable to interest rate increases, so when there's volatility investors head to safer securities. In this case, it was a downgrade from Bank of America that triggered the decline in Apple, which brought other big names down with it, such as Alphabet and Microsoft. "Shares have outperformed significantly YTD ... and have been perceived as a relative safe haven," BofA analyst Wamsi Mohan wrote Thursday, in downgrading Apple to a hold. "However, we see risk to this outperformance over the next year, as we expect material negative est. revisions driven by weaker consumer demand." Still, a vast majority of analysts on the Street have Apple at a buy rating.

3. Toyota CEO stands by EV plan

Akio Toyoda has heard your complaints that his company, Toyota, isn't moving fast enough to go all-in on electric vehicles, but he's not budging. "That's our strategy and we're sticking to it," the CEO said. While Ford and General Motors have been telling investors, customers and politicians alike that they're going all-electric, Toyota is taking an all-of-the-above approach. That means producing gas-electric hybrids, like the Prius, as well as hydrogen-electric vehicles and plugins. The company has increased investments in electric vehicles, but it doesn't view EVs as the only solution. "Everything is going to be up to the customers to decide," Toyoda told reporters Thursday.

4. Nike has an inventory problem

It looks like people will be getting a lot of steeply marked-down Nike gear for holiday gifts this year. The sneaker and sporting goods company said in its earnings report Thursday that it's overwhelmed with products from multiple seasons because of supply chain problems. Some shipments showed up after taking too long, Nike said, while the company is also getting products for the holiday shopping season, which it ordered early to hedge against shipping delays. Overall, the company's inventory jumped 44% in the prior quarter, and by 65% in North America, its largest market. So that's left Nike with no choice but to "aggressively liquidate" big chunks of its inventory, said CFO Matthew Friend. Nike isn't the only one in selling mode: Shares of the company fell in off-hours trading.

5. Ian strengthens after pummeling Florida

Ian became a hurricane again after it barreled through Florida and hit the Atlantic Ocean. Now the storm is on a collision course with South Carolina, where it's projected to make landfall Friday afternoon. Parts of the state could receive 8 inches of rain while suffering from severe flooding and winds, weather authorities said. Ian has already left a wide path of destruction in Florida, and knocked out powered to millions. President Joe Biden warned of a "substantial loss of life." Images of Fort Myers, Florida, were particularly horrifying: Lingering floods, boats left on streets, houses smashed. "Watching the water from my condo in the heart of downtown, watching that water rise and just flood out all the stores on the first floor, it was heartbreaking," Fort Myers Mayor Kevin Anderson told NBC's "Today."

— CNBC's Alex Harring, Jordan Novet, Michael Wayland and Lillian Rizzo contributed to this report.

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