Here are five things you must know for Wednesday, September 21:
1. — Stock Futures Edge Higher With Fed In Sharp Focus
U.S. equity futures were little-changed in pre-market trading Wednesday as investors dug in for what could be a crucial Fed rate decision while edging towards safe-haven assets following a Russian effort to mobilize troops for its war on Ukraine.
In a speech aimed at boosting the number of soldiers for the country’s military campaign in Ukraine, President Vladimir Putin accused western leaders of ‘nuclear blackmail’ and insisted that Russia had the weaponry to reply to any perceived threats.
The escalated rhetoric, less than a week after reports suggested a pullback of Russian troops in southern Ukraine, rattled global markets, triggering a jump in the U.S. dollar and a surge higher in oil prices.
WTI futures for November delivery were marked $2.06 higher at $86 per barrel in overnight trading, while the dollar index rose 0.42% against a basket of its global peers to trade at 110.687.
Benchmark Treasury bond yields, which move in the opposite direction of prices, were modestly lower as investors plowed cash into riskless assets, pulling 2-year notes 5 basis point lower to 3.944%.
Those moves may not last through today’s session, however, with the Federal Reserve slated to unveil its September rate decision at 2:00 pm Eastern time, following by a question-and-answer session with the media 30 minutes later in Washington.
The prospect of hawkish rate signaling later this week from the Bank of England, the Swiss National Bank and the Bank of Japan is also likely to keep rate elevated and stocks on the back foot.
In Europe, however, the Stoxx 600 was marked 0.3% higher in early Frankfurt trading as the single currency eased to 0.9901 against the greenback. That followed a 1.4% decline for the MSCI ex-Japan index in Asia as stocks in China sunk to a four-month low on growth concerns in the world’s second-largest economy.
On Wall Street, futures contracts tied to the S&P 500 are indicating a 4 point opening bell bump while linked to the Dow Jones Industrial Average are priced for a 32 point gain. Futures tied to the tech-focused Nasdaq are indicating a 5 point move to the upside.
2. — Powell To Clarify Fed Rate Path As Inflation Debate Rages
The Federal Reserve is expected to deliver another 75 basis point rate hike Wednesday as it extends its inflation fight into a third consecutive policy meeting amid the fastest consumer price increases in four decades.
The CME Group’s FedWatch tool suggests an 84% chance of a move that will take the Fed Funds rate to a range of between 3% and 3.25%, with much smaller bets on an outsized hike of 100 basis points, fueled in part by last week’s hotter-than-expected August inflation reading of 8.3%.
However, with the core measure of the Fed’s preferred inflation gauge, the PCE Price Index, showing signs of retreat, and the Fed’s rate signaling suggesting a least another 1% to 1.25% in hikes between now and the end of the year, investors may look for comments from Chairman Jerome Powell as to when, rather than if, the Fed will begin considering a pause in monetary tightening.
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“We would be surprised by a serious change in tone from Chair Powell’s press conference today, but we expect him to leave the door clearly open to switching to a 50 basis point hike in November,” said Ian Shepherdson of Pantheon Macroeconomics.
3. — Gas Prices Rise, Ending 99 Day Streak Of Declines, As Oil Jumps
U.S. gasoline prices rose for the first time in more than three months Wednesday, snapping a near 100 day run of declines, amid an overnight leap in crude oil prices.
Data from the American Automobile Association indicates the national average pump price rose by less than a penny, to $3.681 per gallon, ending a streak of 99 consecutive days of declines, the longest downward stretch since 2015.
The move higher, while modest, could mitigate the anticipated pullback in domestic inflation over the coming months, particularly if its paired by a jump in heating oil and broader energy prices heading into the winter months.
Data from the Energy Department, expected at 10:30 am Eastern time, will also provide some near-term clarity on domestic production and refining rates, as well as the levels of stockpiles held in the Strategic Petroleum Reserve.
4. — Beyond Meat Suspends Executive After Weekend Arrest in Arkansas
Beyond Meat (BYND) shares moved lower in pre-market trading after the plant-based food group suspended a senior executive following his arrest for a violent incident over the weekend.
Chief operating officer Doug Ramsey was arrested in Fayetteville, Arkansas following media reports that he was involved in an altercation outside the University of Arkansas’ football stadium. Ramsey, who joined the group in December of last year following a three-decade career at Tyson Foods (TSN) , is alleged to have bitten another man’s nose during the incident.
“Doug Ramsey, chief operating officer, has been suspended effective immediately,’ the company said in a brief statement late Tuesday. “Operations activities will be overseen on an interim basis by Jonathan Nelson, senior vice president, manufacturing operations.”
Beyond Meat shares were marked 1.68% lower in pre-market trading to indicate an opening bell price of $15.76 each.
5. — Stitch Fix Shares Dive After Q4 Loss, Muted Sales Outlook
Stitch Fix said sales for the three months ending in July fell 16% from last year to $465 million as the group posted a wider-than-expected loss of 99 cents per share. Looking into the current quarter, Stitch Fix said it sees sales holding at between $455 million and $465 million, with full-year revenues in the range of $1.76 billion to $7.86 billion.
“The realities of record inflation levels and a deteriorating retail landscape resulted in slower discretionary spend in apparel and presented us with an increasingly challenging fourth quarter,” group president Elizabeth Spaulding told investors on a conference call late Tuesday. “We’re clear-eyed about the current challenges that the macro environment presents, and we remain focused on the key initiatives discussed today in order to deliver exceptional shopping and styling experiences to our clients and to achieve profitability in the future.”
Stitch Fix shares were marked 8.9% lower in pre-market trading to indicate an opening bell price of $4.30 each.