December S&P 500 futures (ESZ22) are trending up +0.38% this morning after three major US benchmark indices jolted up and down before plunging in the final 30 minutes of trading to close Wednesday in the red, as market participants reacted wildly to another considerable Federal Reserve increase and its commitment to keep up hikes into 2023 to combat inflation. Three major U.S. stock indexes were weighted down primarily by losses in the Telecoms, Basic Materials, and Consumer Services sectors.
The Fed raised rates by 0.75% and said in a statement following a two-day meeting of policymakers that it expects its policy rate to hit 4.4% by year end, which is well above the 3.8% projected previously, and rise to 4.6% by the end of 2023. On the ground of this, U.S. rate futures have priced in a 33.8% chance of a 50 basis point rate increase and a 66.2% chance of a 75 basis point hike at November’s monetary policy meeting.
“Chairman Powell delivered a sobering message. He stated that no one knows if there will be a recession or how severe, and that achieving a soft landing was always difficult,” said Yung-Yu Ma, a chief investment strategist at BMO Wealth Management.
Today, investors are likely to focus on the U.S. Initial Jobless Claims data, which was at 213K last week. Economists, on average, forecast the new figure to be 218K.
U.S. Current Account data will be reported today as well. Economists forecast this figure to come in at -260.6B in the second quarter, compared to the previous value of -291.4B.
In the bond markets, United States 10-Year rates are at 3.524%, up +0.35%.
The Euro Stoxx 50 is down -0.34% this morning as tech stocks slide after the U.S. Federal Reserve delivered another large interest rate hike and signaled more increases in the future, ahead of a series of regional central bank meetings. At the same time, European Central Bank board member Isabel Schnabel said interest rates need to keep rising as inflation is too high, even with slowdown risks.
The Swiss National Bank’s (SNB) interest rate decision was released today.
The SNB’s new interest rate came in at 0.50%, in line with expectations.
In addition, the Bank of England is scheduled to hold a meeting today and announce its interest rate decision in a couple of hours. Economists forecast the new interest rate to be 2.25%.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.27%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.58%.
China’s Shanghai Composite today closed down, following Wall Street after Fed’s latest hawkish rate hike to cool off galloping inflation, with technology stocks being the worst hit.
At the same time, Japan’s Nikkei Stock Index ended lower and hit a new 1-month low as the Bank of Japan kept its low interest rates on Thursday, despite a decreasing yen and rising inflation. The index’s downward momentum was fueled by losses in the Transportation Equipment, Automobiles & Parts, and Glass sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 6.21% to 22.57.
Pre-Market U.S. Stock Movers
Spero Therapeutics Inc (SPRO) gained over +80% in pre-market trading after the company announced an exclusive license agreement for a late-stage antibiotic asset, Tebipenem HBr, with GSK.
Eli Lilly and Company (LLY) gained about +1% in pre-market trading after the FDA approved Retevmo for adult patients with locally advanced or metastatic solid tumors.
Salesforce Inc (CRM) gained about +2% in pre-market trading after the company announced its revenue target of $50 billion in FY26, representing a 17% CAGR.
Meta Platforms Inc (META) rose about +1% in pre-market trading after the company announced its plans to cut costs by at least 10% within the next few months.
Trip.com Group Ltd ADR (TCOM) increased about +2% in pre-market trading after the company reported revenue of RMB4 billion, beating analysts’ estimates. However, the company reported an EPS of (RMB0.31), worse than the analyst estimate of RMB0.15.
Novavax Inc (NVAX) plunged more than -3% in pre-market trading after JPMorgan downgraded the stock to underweight from neutral with a price target of $27, down from $132.
Today’s U.S. Earnings Spotlight: Thursday – September 22nd
Costco (COST), Accenture (ACN), FactSet Research (FDS), Darden Restaurants (DRI), Aspen (AZPN), Sprott Physical Gold and Silver Trust (CEF), Manchester United (MANU), Scholastic (SCHL), AAR (AIR), Polymetal (POYYF), Tritium Dcfc (DCFC), Cognyte Software (CGNT), Skillsoft Corp Class A (SKIL), Uxin (UXIN), Mesabi Trust (MSB), IBEX (IBEX), Niocorp Developments (NIOBF), CalAmp (CAMP), Bridgford (BRID), Dynagas LNG (DLNG), PharmaCyte Biotech (PMCB), Renalytix AI Nas (RNLX), Research Solutions (RSSS), Flux Power Holdings (FLUX), Senstar Technologies (SNT), Espey Mfg&Electronics (ESP), US Gold (USAU), Applied Genetic (AGTC), Sears (SHLDQ), Coffee Holding (JVA), Dynatronics (DYNT), Christopher Banks (CBKCQ), Bon-Ton Stores (BONTQ), LiNiu Tech (LINUF).
More Stock Market News from Barchart