- Stock futures gain ahead of Fed decision.
- House Dems pass bill to avoid shutdown, suspend debt limit.
- Pfizer provides 500 million more Covid vaccine doses to U.S. for donation.
- Commodities rallied while the dollar was steady.
(Sept 22) The nation’s largest banks are asking an international body of regulators to give them the space to grow their crypto asset exposures, sparking debate over where guardrails should be placed on the emerging asset class.
At 08:03 a.m. ET, Dow e-minis were up 189 points, or 0.56%, S&P 500 e-minis gained 23.5 points, or 0.54%, and Nasdaq 100 e-minis jumped 47.5 points, or 0.32%.
Stocks making the biggest moves premarket:
- FedEx shares slid 6.2% premarket. The delivery giant spent an additional $450 million tied to problems attracting workers in its latest quarter, contributing to an 11% drop in profit. RivalUPSwas also down, by 2.5%.
- Shares of Stitch Fix Inc. were looking spiffy with a 13% premarket jump. The online personal shopping and styling service reached $2 billion in annual sales for the first time.
- General Mills shares rose 1.7% after the maker of grocery staples like Cheerios, Häagen-Dazs and Betty Crocker said it expects changes in consumer behavior brought on by the pandemic to result in continued high demand for food at home.
- Crude prices gained more than 1%, and oil producers were riding the coattails.Occidental Petroleumadded 1.9% premarket, Devon Energy gained 1.8% andDiamondback Energyrose 2%.
- Sometimes an earnings beat isn’t enough. Software companyAdobereported higher profit and record revenue in the latest period, but its stock was down 3.7% premarket.
- Marin Software surged over 80% in premarket trading
- Bitcoin was up 2.7%, a move that has often boosted the stock ofCoinbase Global—but premarket the cryptocurrency exchange added a more muted 0.2%. Perhaps investors are still licking their wounds after the companyscrapped its plans for a lending programthat had provoked threats of regulatory action.
- Black Berryand KB Home are among the companies reporting earnings after Wednesday’s close.
In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices.
Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders. Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher.
In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET. FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift
Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved.
In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.
To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September.
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