Stock Rebound, Powell, Pound, Hurricane Ian – 5 Things to Know

Stock Rebound, Powell, Pound, Hurricane Ian – 5 Things to Know

Here are five things you should know for Tuesday, September 27:

1. – Stock futures bounce as the dollar falls

US stock futures rose on Tuesday, likely to break the five-day losing streak on Wall Street, while the dollar retreated from two-decade highs amid a modest recovery in global equities.

The US dollar index, which measures the greenback against a basket of six global currencies, fell 0.4% in overnight trading as investors lifted global stocks from two-year lows following an overnight plunge into bear market territory for the Dow Jones Industrial Average. .

In what could be a comfortable rally after five days of declines, as well as a 7.6% slide in September for the S&P 500, stocks in Europe and Asia posted modest gains as currency markets stabilized and the pound recovered nearly 5% from historic lows. It arrived against the dollar earlier this week.

With a few key data released this week ahead of the PCE price index on Friday, and only two reports on the company’s earnings – both expected on Thursday – to guide markets in the near term, traders and investors are likely to focus on Dollar Day. Today’s movements, as well as a resurgence in the main volatility scale of the CME group, for a broader trend.

In fact, the Vix is โ€‹โ€‹up 3% in overnight trading at 30.84 points, about 4 points south of the recent mid-June peak.

The benchmark 2-year Treasury yields also eased along with the dollar, falling to 4.285% in evening trading after a weaker-than-expected auction of $43 billion in new notes yesterday afternoon.

Oil prices were also active, rising from their lowest levels in more than nine months, as the dollar weakened and traders looked ahead to next week’s OPEC meeting in Vienna and the possibility of production cuts to support plunging prices.

READ ALSO :   Burger King puts another new Whopper on the menu

West Texas Intermediate crude futures for November delivery recorded a rise of $1.37 at $78.08 a barrel in overnight trading, while Brent contracts for the same month rose $1.45 to $85.51 a barrel.

In Europe, the region-wide Stoxx 600 Index is up 0.24% in early Frankfurt trading while the UK’s FTSE 100 Index, whose major components earn the bulk of their revenue outside the UK, is up 0.2.

On Wall Street, futures linked to the S&P 500 are quoting an opening bell gain of 26 points, while futures linked to the Dow Jones Industrial Average are priced up 180 points. Futures contracts related to the technology-focused Nasdaq are pointing to a 103 point move to the upside.

2. – Focus on Powell’s speech as the Fed maintains a hawkish message

Federal Reserve Chairman Jerome Powell is set to deliver opening remarks at a banking conference in St. Louis on Wednesday as investors remain focused on the central bank’s path to raising interest rates between now and the end of the year.

With more than two dozen Fed speakers in the field this week, and interest rate futures still widening the chance of a fourth straight 75 basis point rate hike from the Fed next month, investors will be keen to look for any cracks in the fight against inflation. The facade that Powell and his colleagues have erected since the president’s speech at Jackson Hole last month.

However, Loretta Meester, president of the Federal Reserve Bank of Cleveland, noted in a speech at the Massachusetts Institute of Technology late Monday that while the Fed would “establish appropriate monetary policy for the US economy,” it would not do so “in a vacuum.” Believing that we are an independent island and not connected to the rest of the worldโ€ and the constant market fluctuations.

READ ALSO :   Analysis - ECB's QT could be next challenge for turbulent markets

However, her message and that of her colleagues regarding further rate increases remained consistent: โ€œIn order to put inflation on a sustainable downward path to 2%, monetary policy must be in a restrictive position, with real interest and rates heading into positive territory and remaining there for some time.โ€ .

Powell is scheduled to begin his opening remarks at 10:15 a.m. ET.

3. – The Pound rebounded again as the Bank of England signaled support

The British pound rebounded from historic lows against the dollar on Monday, but it remains steady in the eyes of foreign exchange traders even after a late-hour statement on possible support from the Bank of England.

The dollar-to-pound exchange rate, known by currency traders as “the cable”, has risen nearly 5% since hitting a low of 1.0325 on Monday and was last held at 1.0802 in early London trade.

However, the slump, caused last week by Finance Minister Kwasi Quarting’s “mini-budget” statement that included $80 billion in new borrowing – the largest increase since 1972 – rocked global currency markets and broader risk sentiment.

The UK money market is now trading at least another 1.75% in the Bank of England’s near-term rate hike to defend the currency, although only yesterday the BoE itself would say that it is “watching developments in the financial markets very closely in light of Repricing large financial assets โ€œbut no changes in interest rates are likely until their next meeting scheduled in October.

4. – Starbucks prepares to start business talks with union cafes

Shares of Starbucks SBUX rose in premarket trading after the world’s largest coffee chain said it plans to start negotiating business contracts with union coffee shops next month.

Starbucks, which has seen about 240 of its 15,000 US stores form unions over the past year, will begin “hopefully setting dates and securing locations to bargain contracts” in October. Personnel costs will remain a mainstay in the group’s recently-improved profit targets, which forecast earnings growth of between 15% and 20% over the next three years.

READ ALSO :   The British economy is showing signs of recession

The new forecast, which also includes similar sales growth increases, comes amid an overall goal of reaching 45,000 stores — with 2,000 new US additions and 4,500 in China — by the end of fiscal year 2025.

Starbucks shares were marked 1.6% higher in premarket trading for an opening bell price of $86.15 per share.

5. Hurricane Ian picks up speed, and can hit Tampa like a Cat 4 Storm

The National Hurricane Center said Tuesday that Hurricane Ian made landfall in Cuba, and is now rapidly increasing as it makes its way to Florida’s Gulf Coast and the city of Tampa.

Hurricane Ian, now considered a Category 3 story, has maximum winds of 125 mph, said NHC, and is on track to forecast Florida’s west coast later Tuesday before hitting Tampa on Wednesday as the fastest Category 4. tornado.

“Florists from up and down the Gulf Coast should feel the effects of that,” Governor Ron DeSantis said Tuesday during a news conference at the state’s Emergency Operations Center. “This is a really big hurricane at this point.”

More than 5,000 National Guard soldiers have been activated as part of the state’s preparedness effort, with evacuation orders issued in Tampa’s low-lying areas as of late Monday night.

The Latest

To Top