MARKET WRAPS
Watch For:
Fed interest rate decision; ADP National Employment Report; EIA Weekly Petroleum Status Report; CVS Health earnings; Ford October sales
Opening Call:
Today's Headlines:
-Musk: Blocked Twitter Users Won't Be Allowed Back Until Process in Place
-China PBOC Governor Pledges to Keep Yuan Stable
-HKEX Suspends Trading Due to Typhoon Signal
Follow WSJ markets coverage here.
Stock futures on Wednesday were firmer, though traders seemed wary of making overly bold bets ahead of the Federal Reserve's monetary policy decision.
Investors have priced in another 75 basis point hike by the Fed, the fourth such chunky rise in a row. However, stocks have rallied off recent lows on hopes Jerome Powell may signal the pace of rate hikes may slow from hereon.
"Investors are waiting for clues from the Federal Reserve about the path of rate rises, and in the meantime a slightly more wary mood has settled on the markets," Hargreaves Lansdown said.
Some analysts have warned that equity bulls may have become over optimistic that Powell is about to signal a less hawkish stance, particularly given how sticky inflation remains and how relatively robust the U.S jobs market is.
Ahead of the Fed decision, the market will receive some more economic data, including the ADP employment report for October, due at 8:15 a.m.
Helping support stocks was a well-received earnings report from chipmaker AMD, delivered after Tuesday's closing bell.
Read Barrons.com: Nvidia, Intel, and Micron Stocks Rise as AMD Outlook Calms Fears
Meanwhile, in China, investors continued to bet on rumors that Beijing was considering relaxing its Covid-19 lockdown policy. The Hang Seng China Enterprises index, which closed on Monday at a 17-year low having fallen about 40% so far in 2022, took its two-day rebound to 8.2%.
Forex:
The Fed is expected to raise interest rates by 75 basis points later Wednesday, but the dollar may edge lower if policymakers signal plans to reduce the pace of rate rises in future, UniCredit Research said.
Dollar falls would be limited, however, as this signal wouldn't be a surprise given some board members have suggested this in recent weeks.
"The dollar might give back yesterday's gains, but such news would not catch investors off guard and would be unlikely to drag the DXY much below 110."
Energy:
Oil futures were flat in Europe, giving back Asian gains, as investors reassessed Tuesday's rumor driven rally. "Any nod from China that an earlier-than-expected China reopening is on the cards," could see oil power higher, SPI Asset Management said.
Metals:
Base metals and gold were higher in Europe ahead of an expected Fed rate rise and Commodity Research Group said if the central bank "shuts the door" on talk of a rate peak, it would "deflate some of the recent commodity rallies we have seen."
TODAY'S TOP HEADLINES
Elon Musk Says Blocked Twitter Users Won't Be Allowed Back Until Process in Place
Elon Musk said Twitter Inc. won't let anyone who was removed from the service for violating its rules back on the platform until the company has a clear process in place, which he said will take at least a few weeks.
Mr. Musk, who recently completed a $44 billion takeover of the company, said on Twitter early Wednesday that he had spoken to a number of civil society leaders about how the company "will continue to combat hate & harassment & enforce its election integrity policies."
AMD Forecasts Deepening Slump in PC Sales as Consumer Demand Softens
Advanced Micro Devices Inc. issued a glum sales outlook for the current quarter and said it would cut spending as the chip maker responds to a deep slump in demand for consumer products.
AMD Chief Executive Lisa Su said the company was cutting expenses in businesses that weren't doing as well to adapt to the soft demand outlook. She didn't quantify the amount of the cuts on a call with analysts Tuesday after the company issued third-quarter earnings.
Mondelez International Raises Outlook Despite Lower Profits
Mondelez International Inc. raised its full-year outlook as consumers continue to absorb higher prices for its snacks, though extra costs took a chunk out of its bottom-line in the third quarter.
The Chicago-based maker of Oreo cookies and Triscuit crackers said sales rose 8.1% to $7.76 billion in the latest quarter, driven by higher pricing and volume. It also started to log sales following its acquisitions of energy bar marker Clif Bar & Co. and baked goods company Chipita Global S.A., deals valued at $2.9 billion and $2 billion respectively.
Prudential Suffers Big Loss on Rising Rates
Rising interest rates and volatile stock markets battered insurer Prudential Financial Inc. in the third quarter, while American International Group Inc. was stung by claims from Hurricane Ian in Florida, the companies said.
The two big insurers faced different challenges in the difficult quarter. Prudential's so-called adjusted operating income slid 46% to $803 million from $1.49 billion, and it swung to a loss of $284 million on a net basis, from net of $1.53 billion in the year-earlier period.
Dentsply Sirona Finds Improper Accounting for Incentives, Plans to Restate Earnings
Dentsply Sirona Inc. plans to restate its earnings and strengthen controls around financial reporting after wrapping up an internal investigation that delayed its quarterly filings for months and put the dental-products maker at risk of delisting.
The Charlotte, N.C.-based company, which makes X-ray machines and dental drills, in March began investigating its use of incentives to sell products to distributors last year and whether it properly accounted for those incentives. Dentsply on Tuesday said it found it used incorrect accounting and assumptions in determining estimates tied to provisions for sales returns and warranty reserves.
China PBOC Governor Pledges to Keep Yuan Stable
China will aim to keep the yuan's exchange rate stable at a reasonable and balanced level and for the economy's potential growth rate to be in a reasonable range, said People's Bank of China Gov. Yi Gang.
The remarks by the central bank governor came as the Chinese currency has faced mounting downward pressure against the U.S. dollar in recent months, while the economy remains pressured by a prolonged property-sector slump and a stringent Covid-19 policy.
Japan Finance Minister Says Concerned About Gradual Weakening of Yen
Japanese Finance Minister Shunichi Suzuki on Wednesday showed a broader concern about the yen's weakness, saying the slower pace of the yen's depreciation, not just sharp movements, isn't desirable for the Japanese economy.
"I am very concerned about the gradual weakening of the yen" because a weaker yen could accelerate inflation in Japan by increasing the cost of imports, Mr. Suzuki said in parliament.
HKEX Suspends Trading Due to Typhoon Signal
The Wednesday afternoon trading session in Hong Kong has been canceled due to a typhoon alert issued by the government.
"Trading in the securities market, including Stock Connect trading, and derivatives markets will be suspended at 13:55," the city's exchange operator, Hong Kong Exchanges and Clearing Ltd., said in a statement.
North Korea Brackets the South With a Barrage of Missiles
North Korea fired more than 10 missiles off its eastern and western coasts on Wednesday, Seoul's military said, with one missile triggering an air-raid warning for residents on Ulleung Island, off the east coast of South Korea.
Seoul's military said North Korea launched different kinds of missiles but did not immediately provide further details.
Biden Warns GOP Would Slash Social Security, Medicare, in Pitch to Older Voters
WASHINGTON-Democrats are pushing an economic message in an 11th-hour pitch to older voters in next week's elections: Republicans will put entitlements at risk if they take control of Congress.
President Biden made that argument on Tuesday outside Fort Lauderdale, Fla. describing the programs as under siege by the GOP. Republicans in the House and the Senate have called for a range of changes to Medicare and Social Security, which they say would ensure the programs' future and curb federal spending.
Israel Election Puts Benjamin Netanyahu on Brink of Comeback
TEL AVIV-Former Israeli Prime Minister Benjamin Netanyahu is on the cusp of a comeback that could usher in one of the country's most right-wing and religious governments, after Israelis delivered him and his political allies a clear edge in Tuesday's election.
Mr. Netanyahu's Likud party is projected to win 31 seats, with 84% of the vote counted, according to Israeli public broadcaster Kan, while Prime Minister Yair Lapid's centrist Yesh Atid party is projected to win 24 seats. A government led by Mr. Netanyahu is projected to win between 62 and 65 seats in the 120-seat parliament, or Knesset, according to calculations by Kan.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
3Q unless stated otherwise
Bausch + Lomb
Brookfield Infras
Calfrac Well
Canaccord Genuity 2Q
Canada Goose 2Q
Cenovus Energy
Ceridian HCM
Equinox Gold
GFL Environmental
Great-West Lifeco
Loop Energy
NFI Grp
Nutrien
Parkland
Pason Syss
PHX Energy
Sandstorm Gold 4Q
Savaria
Secure Energy
Sherritt Intl
Spin Master
STEP Energy
Sun Life
Suncor Energy
Tourmaline Oil
Waste Connections
Economic Indicators:
None scheduled
Stocks to Watch:
Frontera 3Q Sales $276.3M Vs. $145.9M; 3Q Loss/Shr $0.30 Vs. EPS $0.39; Frontera Produced 41,033 BOE/Day in 3Q, Averaging 41,238 BOE/Day in Yr to End-3Q; Continues to Deliver on Production Guidance With Over 41,200 Bbl a Day, Representing 10% on Year Growth; Expects to Keep Generating Strong Free Cash Flow in 4Q, Advance High-Impact Exploration Growth Prospects
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Gran Tierra Energy 3Q EPS 10c
Other News:
(MORE TO FOLLOW) Dow Jones Newswires
11-02-22 0546ET
