Markets A.M.: Fed Day is Here

Hello and happy Fed day. I'm Caitlin McCabe, here to bring you up to speed on today's market action.

Wednesday's the high point in a hectic week for central bankers. A day after the Bank of Japan called time on negative rates, investors expect fewer fireworks from the Federal Reserve. But they will be watching closely for updates on the timing, and frequency, of future rate cuts. Stock futures were muted as the morning got going.

Follow our live coverage throughout the day for the latest news affecting markets.

Meanwhile, our James Mackintosh looks at how higher rates, inflated prices and a drawdown in pandemic savings have created a toxic mixture for many still reaching for the American dream.

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Stocks to Watch

Intel $(INTC)$ : The U.S. government granted the company up to $8.5 billion to help fund new chip plants . Its shares rose nearly 4% in premarket trading.

Chipotle Mexican Grill $(CMG)$ : The restaurant chain's board approved a plan for a 50-for-1 stock split . Shares rose in off-hours trading.

Kering (FR: KER) (PPRUF) : Shares of the Gucci owner dropped 14% after it warned of a steep decline in sales . Other European luxury stocks, including LVMH Moet Hennessy Louis Vuitton (FR:MC) and Burberry Group (UK:BRBY) , also sold off.

JetBlue $(JBLU)$ : The airline's shares fell more than 2% in thin premarket trading, following three days of declines. JetBlue said Tuesday it would exit certain cities and end some flight routes due to weak performance.

General Mills $(GIS)$ is set to post earnings ahead of the market open.

Results are due from memory-chip manufacturer Micron Technology $(MU)$ after the close.

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The American Dream Accelerates Away From Those in the Slow Lane

By James Mackintosh

Much of America's two-speed economy is powering ahead, but it has left a trail of destruction behind it.

The laggards are starting to get into serious trouble, with the worst-hit, low-income consumers held back by powerful forces: higher interest rates, inflation and the depletion of pandemic-era support.

This is terrible news for those left behind, and bad too for investors in the companies that sell to them. It's also hitting companies that are laggards themselves, indebted and caught out by changes in the economy.

Keep reading .

The Wall Street Journal's Evan Gershkovich is being wrongfully detained in Russia after he was arrested while on a reporting trip and accused of spying-a charge the Journal and the U.S. government vehemently deny. Follow the latest coverage , sign up for an email alert , and learn how you can use social media to support Evan.

Charting the Markets

For investors, the big question around the Fed meeting is whether it will wait a little longer to cut rates. The central bank is focused on a different issue : If it waits too long, will it inadvertently cause a recession?

Investors needn't worry about Nvidia's competitive position, writes Heard on the Street's Dan Gallagher. The bigger risk for Nvidia is if other companies' generative AI services see tepid demand.

UBS's culture of risk aversion does seem entrenched, writes Heard on the Street's Jon Sindreu . But the Swiss lender is walking a tightrope: It wants to use Credit Suisse's operations to become the sixth-largest investment bank in the U.S.

Must Reads

Russia's seizure of billions of dollars worth of foreign-owned planes has set off the biggest-ever brawl in the normally staid business of aircraft insurance. At stake: over 400 planes and hundreds of millions in legal costs.

"Star Wars" creator George Lucas is endorsing Disney and Chief Executive Bob Iger in their proxy fight against activist investor Nelson Peltz. "Creating magic is not for amateurs," he said.

Steward Health Care System, which operates 31 hospitals in eight states, is in a deep cash crunch . The result: Suppliers are routinely demanding cash up front, traveling nurses have left jobs, and garbage collectors have cut off one hospital for unpaid bills.

More:

For These Companies, It Feels Good to Be in Nvidia's Orbit Deeming Mass Layoffs a 'Failure of Leadership,' One Company Fine-Tunes a Strategy to Avoid Them Bankrupt Crypto Lender Genesis Agrees to Pay $21 Million to Settle SEC Charges This Day in Markets On this day in 1602, the Western world's first major publicly traded company was born, as the Dutch legislature granted a monopoly on trade to the Verenigde Oostindische Compagnie, or Dutch East India Co., which dealt in booming consumer products like cloves, tea, black pepper and Chinese porcelain. In 1609, the company's directors declared that investors couldn't sell their shares back to the company, but only to other investors-giving birth to the modern stock market. About Us

We want to be the first place you go to get ready for the opening bell every day. This newsletter was written by Caitlin McCabe ( @mccabe_caitlin ; [caitlin.mccabe@wsj.com]) in London.

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 20, 2024 07:15 ET (11:15 GMT)

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