MARKET WRAPS
Watch For:
FOMC interest rate decision; EIA Weekly Petroleum Status Report; Bank of Canada monetary policy deliberations; Earnings from FedEx
Today's Top Headlines/Must Reads:
- American Labor's Real Problem: It Isn't Productive Enough
- China Keeps Benchmark Lending Rates Unchanged
- White House Warns of Long Lines at Airports, Other Delays if Government Shuts Down
Follow WSJ market coverage here
Opening Call:
Stock futures held steady on Wednesday ahead of the Federal Reserve's rate decision and comments.
Investors are certain the FOMC will keep interest rates on hold at a range of 5.25% to 5.50%, but are much less sure about what happens after that.
Some recent stronger-than-expected economic data, alongside oil prices moving to a 10-month high, have raised concerns that inflationary pressures will prove stubborn and the central bank thus may have to keep borrowing costs higher for longer.
Consequently, it will be the Fed's accompanying dot plot and Jerome Powell's press conference that will contain potential market moving news.
"Ahead of the FOMC meeting, yields on 10-year Treasuries are reaching a new cycle high, and with investors seemingly inclined to hold onto their recently established long positions in the dollar, all signposts point to a hawkish direction," SPI Asset Management said.
Read Fed Expected to Stay on Hold But Flag Possible Further Rate Increase
Overseas markets were mixed, with European equities broadly higher, while stocks in Asia mostly fell.
In the U.K., bond prices and equities jumped after data showed inflation unexpectedly eased in August. The pound fell, as investors slashed bets that the Bank of England would raise interest rates on Thursday.
Read U.K. Inflation Falls Unexpectedly, Easing Pressure on Bank of England
Premarket Movers
Ford was up 0.2% after Unifor, the union representing Ford's Canadian autoworkers, reached a tentative deal with the U.S. auto maker with just hours to go before a Tuesday strike deadline. Read more .
Goldman Sachs is in advanced talks to sell specialty lender GreenSky to a group of investment firms, WSJ reported, citing people familiar with the matter. Shares rose 0.3%. Read more .
Instacart was falling 5.5% after the company closed Tuesday with a gain of 12% in its trading debut.
Intel was up slightly premarket after slumping 4.3% in the previous session.
Nvidia was among the most heavily traded stocks on the S&P 500 premarket. Shares fell 1%, putting them on track to extend a recent decline.
Pinterest rose 0.8% after executives said they expect a compound annual growth rate over the next three to five years in the mid- to high teens, compared with guidance in the high single digits for the third quarter.
Steelcase said it expects "significantly improved" adjusted fiscal-year earnings as more companies issue return-to-office mandates. The stock rose 3.1%.
Tuesday's Post-Close Movers
Eastern Bankshares will merge with Cambridge Bancorp in an all-stock deal valued at $528 million. Cambridge shares rose 22%.
Sonder Holdings will enact a 1-for-20 reverse stock split to regain compliance with Nasdaq's minimum $1 per share bid price. The reverse split will become effective when the market closes Sept. 20. Shares fell 8.8%.
Taysha Gene Therapies said it would discontinue development of its TSHA-120 program to treat giant axonal neuropathy after receiving study-design feedback from the FDA. Shares fell 7.1%.
Forex:
The dollar could rise after the Fed's policy announcement if there are hints rates could increase further, UniCredit Research said.
The decision shouldn't dent dollar strength and "might even lift it a little further" if Powell "leaves the door open for another hike by the end of the year."
This could lift the DXY dollar index further beyond 105 and potentially drag EUR/USD below 1.0633, UniCredit said.
Read Sterling Falls on Below-Forecast UK Inflation
Energy:
A steep rally for oil prices halted in early European trading, with Brent falling more than 1%, as investors awaited the conclusion of the Fed meeting.
The speed of oil's rally, which had seen it gain almost 27% from its June low to Tuesday's peak, has surprised some oil analysts who expect profit-taking to set in.
"The crude market is heavily overbought and in need of consolidation," Saxo said. "Chatter on $100 [a barrel] oil continues to pick up, but we have little conviction that it would be sustainable."
Metals:
Base metals prices were mixed, while gold tipped lower, in early London trading ahead of the Fed interest-rate decision.
"The impact of better-than-expected economic data [on metals prices] last week has petered out as the focus returns to central bank policies, " ANZ said.
TODAY'S TOP HEADLINES
Marlboro Maker Hits Reset on $2 Billion Bet on Medicine
Philip Morris International's push into healthcare is faltering, prompting the tobacco giant to consider options such as selling a stake in its biggest pharmaceuticals unit.
In 2021, the tobacco giant agreed to acquire three pharmaceutical companies for a total of more than $2 billion as part of a plan to pivot away from cigarette sales. The deals inserted the Marlboro maker into the market for inhalers and other treatments for respiratory diseases that are linked to cigarette smoking.
Clorox Cyberattack Brings Early Test of New SEC Cyber Rules
A cyberattack on cleaning-products maker Clorox is providing an early test for new rules on disclosing cyberattacks, in a case that is being closely watched by business leaders.
Clorox is one of the first large U.S. companies to suffer a cyberattack since the Securities and Exchange Commission's rigorous new cybersecurity rules went into effect Sept. 5.
Beijing Touts China's Economic Resilience, Hits Back at Negative Comments
China's top economic policy makers on Wednesday struck back against widespread pessimism about the country's growth trajectory as Beijing sought to boost business confidence amid persisting headwinds.
In response to recent bearish comments on China's economy, Cong Liang, a senior state planner, said at a press briefing that such negative remarks were never realized in the past and wouldn't materialize this time.
Japan's Exports Fell for Second Straight Month in August
Japan's exports fell for a second straight month in August, dragged down by weakening demand for mineral fuels and semiconductor manufacturing equipment, official data showed Wednesday.
Exports fell 0.8% in August from a year earlier, worsening from July's 0.3% decline, according to data released by the Ministry of Finance. Economists surveyed by data provider FactSet had projected exports to fall 0.5%.
Ukrainian Tactics Put Russia on the Defensive in the Black Sea
ODESA, Ukraine-Commercial vessels have resumed using Ukraine's main port of Odesa without asking permission from Russia for the first time since the war began-showing just how much the balance of power has changed in the Black Sea.
By imposing an asymmetrical war that relies on domestically produced naval drones and missiles, and that targets Russians ships in their own home bases, Ukraine has eroded much of Russia's vaunted naval superiority. Now, it is taking the battle to Russia itself.
Kevin McCarthy Hits New Hurdles With Holdout Republicans
WASHINGTON-House Republican leaders worked to salvage a short-term spending bill that sparked angry disagreements among the party's rank-and-file, but they remained short of the support needed to pass the measure and show the party could unite to avert a government shutdown.
A procedural motion to advance the legislation was canceled for the day to allow more time for talks, and an afternoon measure related to advancing a full-year military appropriations bill failed after five Republicans voted against the rule. That marked an embarrassing reminder to leaders that dissidents were willing to derail routine business to make their protests heard.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
1330 Bank of Canada summary of monetary policy deliberations
Expected Major Events for Wednesday
05:00/JPN: Aug Convenience Store Sales
06:00/UK: Aug UK producer prices
06:00/UK: Aug CPI
06:00/GER: Aug PPI
08:30/UK: Jul UK House Price Index
11:00/US: 09/15 MBA Weekly Mortgage Applications Survey
14:30/US: 09/15 EIA Weekly Petroleum Status Report
17:59/UK: Aug Aluminium Production report
18:00/US: Federal Reserve economic projections
18:00/US: U.S. interest rate decision
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Wednesday
Aberdeen International (AAB.T,AABVF) is expected to report for 2Q.
AppHarvest Inc (APPHQ) is expected to report for 2Q.
Astrotech (ASTC) is expected to report for 4Q.
Bed Bath & Beyond Inc (BBBYQ) is expected to report $0.01 for 1Q.
Contango ORE Inc (CTGO) is expected to report for 4Q.
Espey Manufacturing & Electronics Corp (ESP) is expected to report for 4Q.
FedEx Corp (FDX) is expected to report $3.62 for 1Q.
General Mills (GIS) is expected to report $1.08 for 1Q.
Great Elm Group Inc (GEG) is expected to report for 4Q.
KB Home (KBH) is expected to report $1.44 for 3Q.
Oncorus Inc (ONCR) is expected to report for 2Q.
Perma-Pipe International Holdings Inc (PPIH) is expected to report for 2Q.
Pro-Dex Inc (PDEX) is expected to report for 4Q.
Raymond James Financial (RJF) is expected to report.
Starcore International Mines Ltd (SAM.T) is expected to report for 1Q.
US Global Investors (GROW) is expected to report for 4Q.
Waldencast PLC (WALD) is expected to report for 2Q.
bebe stores (BEBE) is expected to report for 4Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Carnival Raised to Hold From Sell by Truist Securities
CVS Health Raised to Outperform From In-Line by Evercore ISI Group
(MORE TO FOLLOW) Dow Jones Newswires
09-20-23 0616ET
