Here are five things you need to know for Wednesday, March 16:
1. — Stock futures extend gains on China stimulus, Russian-Ukrainian talks
U.S. equity futures extended gains on Wednesday, with Treasury bond yields rising firmly, as investors reacted to Chinese authorities’ pledge to support the Covid-hit economy while bracing for the decision. today on Federal Reserve rates later this afternoon.
Chinese Vice Premier Liu He said Beijing would roll out a series of measures in the coming weeks to support growth in the world’s second-largest economy, which is experiencing a worrying spike in coronavirus infection, while pledging at the same time to ensure the stability of the financial markets.
The move sent Chinese stocks higher and pushed the MSCI index ex-Japan from its lowest level in nineteen months to a 4.2% gain that carried through to the European session.
Hopes for short-term peace talks between Russia and Ukraine, where the fighting has entered its 21st day, have also revived sentiment, with President Joe Biden promising additional relief in Kyiv as he prepares for the meeting of NATO leaders in Brussels on 24 March.
Ukrainian President Volodymyr Zelenskiy said Russia had become “more realistic” during recent talks with kyiv, and further talks with Foreign Minister Sergei Lavrov were scheduled for later in the day.
Investors are also watching Russia’s ability to pay about $117 million in interest on two dollar-denominated bonds, due today, following sanctions that prevented its central bank from tapping U.S. dollar reserves. .
On Wall Street, benchmark 10-year Treasury yields hit 2.18% in overnight trading ahead of today’s Fed rate decision at 2:00 p.m. ET. East, with markets looking to comments from Chairman Jerome Powell for guidance on the path of central bank rates in the face of slowing growth and an accelerating inflation outlook.
February retail sales data is also due at 8:30 a.m. EST, with analysts looking for a monthly gain of around 0.4%.
Futures tied to the Dow Jones Industrial Average point to an opening bell gain of 275 points before trading begins, while those tied to the S&P 500 are priced for a downside move of 44 points.
The tech-focused Nasdaq Composite is also called higher, gaining 230 points, as yields on benchmark 2-year Treasuries hold steady at 1.861% in overnight trading.
2. — Fed prepares for first rate hike since 2018, markets prepare to tighten path details
The Federal Reserve is all but certain to unveil its first rate hike since December 2018 on Wednesday, as the central bank reacts to a string of the fastest inflation readings in four decades, plunging unemployment and steady growth forecasts.
CME Group’s FedWatch tool sees a 98.3% chance that the Fed will raise its base rate between 0.25% and 0.5% this afternoon, with bets now set on how many more rate hikes will take place. he economy – which is slowing considerably but still growing – can withstand the rest of the year.
“Chair Powell will no doubt say that the Fed is aware of the dangers posed by the war in Ukraine and the accompanying spike in energy prices, and that it is prepared to change tack if the economic data changes. deteriorate sharply or if financial conditions tighten materially,” said Ian Shepherdson. of Pantheon Macroeconomics. “But the Fed’s base case for this year will likely go from the three hikes predicted at the December meeting to five, and we wouldn’t be very surprised by six.”
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The Fed is also likely to end the liquidation of its $8.9 trillion balance sheet, but will issue new economic projections for 2022 that will likely reflect the energy price and supply chain-related slowdown captured by the Atlanta Fed’s GDPNow forecasting tool.
3. — Foxconn ‘cautious’ on supply chain, Apple assembler sees flat smartphone revenue in 2022
Apple (AAPL) – Get the Apple Inc. report. shares rose in premarket trading alongside strong gains for the Nasdaq, even as its largest supplier warned it may not have certainty on supply chain disruptions before the end of the year.
foxcon (FXCNY) the world’s largest electronics maker, said net profit for the three months ending December fell 4% from a year ago to $44.4 billion (1, $55 billion), beating Street’s forecast as revenue fell 6%.
Foxconn Chairman Liu Yougn-way said he was “cautiously positive” on sales for the year ahead, but expects a range of -3% to +3% from 2021 levels – with stable smartphone sales – due to supply chain uncertainty and the impact of Covid infections and shutdowns in the Asia region.
Apple told investors in late January that, “given the continued uncertainty around the world in the short term, we are not providing guidance on earnings,” but said March quarter sales would likely slow relative to at their growth rate of 11.2% for the December period.
Apple shares rose 2% in premarket trading to show an opening price of $158.13 each.
4. — Tesla Shutters Shanghai Gigafactory as the city’s Covid cases rise
You’re here (TSLA) – Get the Tesla Inc report shares rose in premarket trading despite concerns over the shutdown of its Shanghai gigafactory linked to the recent Covid outbreak in the Chinese city.
Reuters reported that a notice had been sent to employees of the Shanghai factory, which makes both the Tesla Model 3 sedan as well as the Model Y SUV, would close for two days this week. Although no reason was given for the closure, schools in Shanghai were closed this week and government officials asked citizens not to leave unless the trip was “absolutely necessary”, amid the rising Covid infection rate in the country.
Tesla sold about 116,360 Chinese-made cars in the first months of the year, according to official trade data, most of which were for export to markets in Europe and Asia.
Tesla shares rose 3.1% in premarket trading to show an opening price of $826.20 each.
4. – Live Nation shares slide as senators call for DoJ pricing probe
National Live Entertainment (LYV) – Get the report from Live Nation Entertainment, Inc. The shares fell sharply in premarket trading after two Senate lawmakers urged the Justice Department to investigate the band’s “exorbitant fees” for concert and event tickets.
Democratic Senators Amy Klobuchar and Richard Blumenthal said Live Nation, which merged with Ticketmaster in 2010, said the group’s “aggressive acquisition strategy” and event pricing violated a previous DoJ agreement that allowed the combination with tickermaster to move forward.
“As live events continue to open up, American consumers are faced with skyrocketing ticket prices, opaque terms and exorbitant fees. Yet live entertainment markets, especially ticket markets, are dominated by a single company,” the senators wrote. “We are deeply concerned that the Department’s past enforcement and negotiated remedies in this industry have failed to adequately promote and protect competition in the live entertainment and ticketing markets.”
Shares of Live Nation were marked 2.5% lower in premarket trading to indicate an opening price of $109.00 each.
