Dow opens 100 points higher as Wall Street braces for Fed rate-hike decision

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Stocks open higher ahead of Fed decision

Stocks opened higher on Wednesday as investors looked ahead to the Federal Reserve’s interest rate decision. The Dow Jones Industrial Average gained 171 points, or 0.56%. The S&P 500 climbed 0.57%, and the Nasdaq Composite added 0.34%.

— Samantha Subin

The Fed has a big agenda in addition to expected rate increase

In addition to its expected interest rate hike, the Federal Reserve has multiple other items on the docket for its two-day meeting that concludes Wednesday.

The central bank is expected to raise benchmark interest rates by 0.75 percentage point.

But along with that, it also will provide updates on its economic and rates forecasts over the next three years. Pivotal in that outlook will be the “terminal” rate, or point when the Fed thinks it will need to stop hiking to battle runaway inflation.

Chairman Jerome Powell also will hold his traditional post-meeting news conference, where he is expected to emphasize the Fed’s commitment to battling inflation even if it means harm to the broader economy.

“Fighting inflation is job-one,” said Eric Winograd, senior economist at AllianceBernstein. “The consequences of not fighting inflation are greater than the consequences of fighting it. If that means recession, then that’s what it means.”

—Jeff Cox

Brace for disappointment coming out of the Fed meeting, Comerica’s Lynch says

Investors should prepare for more upset following the Federal Reserve’s latest rate-hike meeting as inflation numbers show persistent pressures beyond just food and energy, said Comerica Wealth Management’s John Lynch.

“Investors will be looking for clarity on the extent of the Fed’s tightening campaign and we suspect they’ll be disappointed,” he said, adding that the inflation moves further complicate the Fed’s decision making.

Given this backdrop, Lynch expects equities to retest June lows and believes third-quarter earnings — and revisions to companies’ guidance — will muddle investor sentiment.

“Fortunately, history shows improved market performance following midterm elections, so we encourage investors to maintain targeted allocations,” he said.

— Samantha Subin

Financials, tech earnings should rebound in 2023, says Credit Suisse’s Golub

Energy earnings have widely outperformed the broader S&P 500 this year, but Credit Suisse’s Jonathan Golub expects the tables to turn come 2023.

“While Energy EPS is forecasted to grow 100%+ in 2022, Financials and TECH+ earnings are projected to experience an outright contraction,” he wrote in a note to clients Wednesday. “However, these distortions are expected to reverse in 2023, with Energy EPS predicted to contract -12% while, Financials and TECH+ earnings are projected to grow double-digits.”

Earnings growth for the S&P 500 is expected to grow by just 6.1% during the first half of 2023, but expand by 9.1% through the second half.

— Samantha Subin

Wheat and corn ETFs gain pre-market as Russia calls up 300,000 reservists

The Teucrium Wheat Fund and Teucrium Corn Fund rose pre-market Wednesday after Russia called up 300,000 reservists to add to forces fighting against Ukraine.

The wheat ETF is higher by about 0.8% while the corn ETF is adding about 0.4%.

December wheat contracts reached a high of $9.195 per bushel earlier, the highest since July 11, while December corn hit $6.985 (only a nine-day high).

— Scott Schnipper, Gina Francolla

Stocks making the biggest moves premarket: Beyond Meat, Stitch Fix, Aurora Cannabis and more

These are some of the stocks making big moves in the premarket:

Stitch Fix — Stitch Fix’s stock slid 5.9% in premarket trading after reporting a wider-than-expected quarterly loss and issuing a weak forecast. The online clothing styling company expects sales to fall over the short term as the number of active customers declines.

Beyond Meat – Beyond Meat suspended Chief Operating Officer Doug Ramsey after he was involved in a physical altercation over the weekend which resulted in third-degree battery and terroristic threatening charges. Beyond Meat fell 1.1% in premarket trading on top of a 6% slide Tuesday.

Aurora Cannabis – Aurora Cannabis lost 2.1% in the premarket after reporting a breakeven quarter, on an adjusted basis, surprising analysts who predicted a quarterly loss. The Canada-based cannabis producer saw overall revenue come in slightly below expectations.

Read the full list of stocks moving in premarket action here.

— Peter Schacknow, Samantha Subin

Dollar index touches fresh high

The dollar index, which has been on a tear in recent weeks, notched a fresh high of 110.869 on Wednesday.

That marked the index’s highest level since June 2002, when it hit a high of 110.87.

Meanwhile, the euro hit a low of 0.9883 against the dollar and its lowest level since Sep. 7. The pound touched a fresh low against the dollar dating back to March 18, 1985.

The dollar also hit its highest level against the Swedish krona since July 2001.

— Samantha Subin, Gina Francolla

General Mills rises amid earnings beat, guidance boost

Shares of General Mills rose 2.5% in premarket trading after the consumer food maker topped earnings estimates and upped its outlook for the full year.

The company posted adjusted earnings of $1.11 per share on revenue of $4.72 billion. Analysts surveyed by Refinitiv had anticipated earnings of $1 a share on $4.72 billion in revenue.

General Mills’ stock is trading up 12% this year and sits about 4% off its highs.

Defense stocks jump as Putin declares partial military mobilization

Defense stock moved about 2% higher on Wednesday amid news that Russian President Vladimir Putin has ordered the partial mobilization of the Russian population.

As part of the mandate, Russia will order military reservists into active service. Putin has also called for more funding to increase weapons production.

Defense stocks rose in premarket trading following the news, with shares of Lockheed Martin, Raytheon Technologies and Northrop Grumman up about 2% each.

Oil prices also jumped amid the news, fueling more uncertainty in the already volatile energy market. U.S. West Texas Intermediate crude was last trading at $86.14 a barrel, up $2.20, or 2.62%. Brent crude futures added $2.28, or 2.52%, to $92.90.

— Samantha Subin, Holly Ellyatt

Goldman says buy Estee Lauder

Goldman Sachs upgraded Estee Lauder to buy from neutral, citing the potential for robust growth going forward as China-related headwinds dissipate.

“While we see near-term challenges in Hainan owing to China’s zero-covid policy and uncertainty around potential lockdowns, we believe it will prove transitory as there are several structural factors in play which can drive sustained Hainan growth going forward even when international travel resumes,” analyst Jason English said.

Estee Lauder shares rose more than 1% in the premarket.

CNBC Pro subscribers can read more here.

— Alex Harring

European stocks nudge higher as markets brace for more Fed action; Uniper down 21%

European markets were cautiously higher on Wednesday as investors in the region braced themselves for another aggressive interest rate move from the U.S. Federal Reserve.

The pan-European Stoxx 600 nudged 0.3% higher by mid-morning, having recouped opening losses of around 0.4%. Travel and leisure stocks fell 1.8% while oil and gas stocks jumped 2.9%.

Oil prices rise after Putin announces partial military mobilization

Russia’s Putin announces partial military mobilization

Russian President Vladimir Putin delivers a speech during a ceremony to receive letters of credence from newly-appointed foreign ambassadors at the Kremlin in Moscow, Russia, September 20, 2022. 

Pavel Bednyakov| Sputnik | Reuters

Russian President Vladimir Putin on Wednesday announced a partial military mobilization in Russia, putting the country’s people and economy on a wartime footing as Moscow’s invasion of Ukraine continues.

In a rare pre-recorded televised announcement, Putin said the West “wants to destroy our country” and claimed the West had tried to “turn Ukraine’s people into cannon fodder,” in comments translated by Reuters.

Putin said “mobilization events” would begin Wednesday without providing many further details, aside from saying that he had ordered an increase in funding to boost Russia’s weapons production.

Read more here.

– Holly Ellyatt

Germany nationalizes energy giant Uniper as Russia squeezes gas supplies

Uniper has received billions in financial aid from the German government as a result of surging gas and electric prices following Russia’s war in Ukraine.

Picture Alliance | Picture Alliance | Getty Images

The German government on Wednesday agreed to the nationalization of utility Uniper as it strives to keep the industry afloat in the wake of a worldwide energy crisis.

Having already accepted in July to bail out the major gas importer with a 15 billion euro ($14.95 billion) rescue deal, the state will now buy out the 56% stake of Finland’s Fortum for a 0.5 billion euros. The German state is set to own around 98.5% of Uniper.

“Since the stabilisation package for Uniper was agreed in July, Uniper’s situation has further deteriorated rapidly and significantly; as such, new measures to resolve the situation have been agreed,” Fortum announced in a statement on Wednesday morning.

Read more here.

Elliot Smith

CNBC Pro: Want to play the EV sector? Analysts say this lithium stock could soar 70%

As interest in battery stocks picks up after a tough year so far, CNBC Pro analyzed a number of stocks in the sector that analysts say have serious potential.

CNBC Pro screened the Global X Lithium & Battery Tech ETF on FactSet for stocks that could outperform. One stock that made the list has jumped over 40% this year so far, and analysts say it has further upside of more than 70%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Fed should prioritize soft landing, says Lazard’s Temple

Even though the Federal Reserve is set to deliver its third consecutive 0.75 percentage point rate hike this week – tripling the pace of tightening – they should be careful not to throw the economy into a recession, said Ron Temple, head of U.S. Equity at Lazard Asset Management.

“Inflation is unacceptably high, and investors, politicians, and consumers are anxious, but patience is a virtue,” said Temple. “Monetary policy works with long and variable lags.”

He added that key drivers of inflation are already falling.

“The Fed should avoid the temptation to overreact to recent data and keep their eyes on the goal of achieving the softest landing possible,” he said.

—Carmen Reinicke

Stitch Fix share falls following report of revenue loss

Shares of Stitch Fix fell about 1.5% in post-market trading. The online styling company reported revenue losses in the fourth quarter after the bell Tuesday.

Stitch Fix reported a loss of 89 cents per share on a net revenue of $481.9 million, which is down 16% from the same period a year ago. Net revenue for the first quarter of 2023 is expected to be down approximately 20% from the same quarter a year prior, the company said in a release detailing its performance.

“Today’s macroeconomic environment and its impact on retail spending has been a challenge to navigate, but we remain committed to working through our transformation and returning to profitability,” said CEO Elizabeth Spaulding.

Full-year revenue was down 1.4% compared to the prior year.

— Alex Harring

Stock futures open flat ahead of key Fed decision

Stock futures opened flat Tuesday evening as Wall Street awaits the Federal Reserve Open Market Committee’s interest rate decision Wednesday. The central bank is expected to deliver another 0.75 percentage point interest rate hike to calm inflation.

Dow Jones Industrial Average futures rose by 20 points, or 0.06%. S&P 500 and Nasdaq 100 futures climbed 0.10% and 0.15%, respectively.

—Carmen Reinicke

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