Stocks Rising, Buying Yen, Bitcoin, Linar, Costco -5 Things to Know

Stocks Rising, Buying Yen, Bitcoin, Linar, Costco -5 Things to Know

Here are five things you should know for Thursday, September 22:

1. – Stock futures bounce in the wake of the Fed’s bustle

US stock futures rose on Thursday, while the dollar tested two-decade highs against its global peers, as investors unpacked a hawkish Federal Reserve rate hike and braced for the impact of policy tightening from major central banks around the world.

The Fed’s decision to boost the Fed’s benchmark rate by 75 basis points, to a range of 3% to 3.25%, was largely expected, but Chairman Jerome Powell’s signal, as well as his suggestion that taming inflation is likely to lead to stagnation. , sent stocks sharply lower as trading closed on Wednesday and carried the US dollar to a 20-year high against a basket of its global peers.

“Reducing inflation will likely require a sustained period of economic growth below the trend,” Powell told reporters in Washington.“No one knows if this process will lead to a recession, or if so, how important that recession will be.”

The tough assessment, which included warnings about rising unemployment and further weakness in the housing market, was coupled with a big move higher in two-year Treasury yields, which rose to 4.12% in the wake of Powell’s comments.

The move now puts the spread on the benchmark 10-year banknote at around 56 basis points, indicating that traders are looking at an increased chance of a near-term recession even as they see the fed funds rate rise at least 1.25% this year and then reach 4.5 % in early 2023.

Meanwhile, the US dollar index touched a two-decade peak of 111.81 in overnight trading before retreating to 110,743 after the Bank of Japan moved to intervene in the currency markets in order to strengthen the yen for the first time since 1998 after its decision. To maintain stable rates.

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The Bank of Japan’s move was followed by a rate hike from the Norges Bank, which raised the key rate by 50 basis points to 2.25%, and the Swiss National Bank raised 75 basis points. The Bank of England is likely to make a similar move when it unveils its latest policy decisions at 7:00 AM ET, although bets on a 75 basis point increase, the largest since 1989, are still being made in futures markets.

Stocks in Europe were trending lower in early trading after last night’s heavy sell-off on Wall Street, with the Stoxx 600 down 0.4% in Frankfurt and the FTSE 100 little changed with the Bank of England interest rate decision.

This followed a 1.05% drop in the previous MSCI Japan Asia Index as stocks in China remained stuck at four-month lows with renewed growth concerns in the world’s second largest economy.

In the US, futures tied to the S&P 500 are pointing to an opening bell gain of 15 points while they are priced against the Dow Jones Industrial Average for 143 points up front. Futures contracts related to the technology-focused Nasdaq are pointing to a 43-point move to the upside.

2. – Japan supports the yen in its first currency intervention since 1998

The Bank of Japan intervened directly in global currency markets overnight, the first such move since 1998, as officials moved to support the yen amid two-decade lows against the US dollar.

Masato Kanda, Japan’s Deputy Finance Minister for International Affairs, told reporters in Japan that the government took “decisive measures” in currency markets after the Bank of Japan’s policy decision that kept interest rates unchanged at record lows.

The move triggered the biggest one-day drop in the dollar against the yen since March 2020, pegging the pair at 141.89.

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Although the Japanese economy is focused on exports, it is sensitive to a weak currency as it boosts the cost of imported energy, which increases the country’s inflation pressures and reduces the purchasing power of its aging population.

3. – JPMorgan CEO Calls Bitcoin a “Decentralized Ponzi Scheme”

c. B. Morgan Chase (JPM) CEO Jamie Dimon told lawmakers late Wednesday that cryptocurrencies, including bitcoin, were little more than β€œdecentralized” Ponzi schemes and that stablecoins required stricter regulation from market watchdogs.

Speaking as part of a panel of senior bank chiefs appearing before the House Financial Services Committee on Capitol Hill, Dimon said that while his bank has been actively involved in developing blockchain technology for the financial services industry, he remains unconvinced about the strength or impact of bitcoin.

β€œI am a major skeptic about cryptocurrencies, which you call currency, like Bitcoin,” Dimon said. “It’s decentralized Ponzi schemes and the idea that it’s good for anyone is incredible.”

Dimon said that stablecoins, with a secured peg to the US dollar, could be beneficial with proper regulation, as the government moves to implement restrictions on new and existing tokens following the TerraUSD crash earlier this year.

Bitcoin prices, which are down more than 60% so far this year, are seen 3.6% higher in the session at $19,124.80 each.

4. – Linar share gain with minimum house price increase

Lennar Corp. (flexible) Stocks fell in pre-market trading after the second-largest US homebuilder posted stronger-than-expected earnings in the third quarter, buoyed in part by higher home prices.

Lenar said adjusted earnings for the three months ending in August, the group’s third fiscal quarter, were steady at $5.03 a share, well above Street expectations for sales of $8.93 billion.

Strong gains in new home prices, up nearly 11% from a year ago at about $404,000 during the final month of the quarter, boosted the group’s net profit, as did a dearth of new inventory in a market that continues to be impacted by supply chain issues and costs. employment.

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Looking at the final months of its fiscal year, Lennar said it expects home deliveries of about 20,500, compared to its July quarter count of 17,248, and new orders in the range of 14,500.

Lennar shares are up 0.83% in pre-market trading to indicate an opening bell price of $76.55 per share.

5. – Focus on Costco profits as shoppers seek to ease inflation

Costco Wholesale Company (cost) Shares fell in pre-market trading ahead of the retail giant’s fourth-quarter earnings after the closing bell.

Analysts are looking to post a profit of $4.16 for the three months ending in early August, the group’s fourth fiscal quarter, on total revenue of $72.07 billion.

Soaring inflation, which reached a four-decade high of 8.5% in July, has prompted many shoppers to turn to wholesale retailers and focus on value, particularly in food, amid a broader decline in discretionary spending. This is likely to support revenue growth, but could impact margins unless Costco can raise prices as a consideration.

However, lower gas prices could reduce their overall total revenue, although lost sales value could be offset in merchandise and food volumes as customers use money saved at pumps to store essentials and household items.

Last month, Wal-Mart (WMT) It posted stronger-than-expected earnings for the three months ending in July, thanks in part to a big jump in same-store sales. However, the world’s largest retailer said overall headwinds, combined with a stronger US dollar, would result in a 9%-11% decline in its full-year earnings.

Cost shares were down 0.54% in pre-market trading to indicate an opening bell price of $490.40 per share.

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