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New Home Sales for February; EIA Weekly Petroleum Status Report
Opening Call:
Stock futures edged lower Wednesday as investors considered comments from Federal Reserve officials that endorsed interest-rate increases to combat inflation.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said that "while the increasingly hawkish tone of the Fed is unequivocally bad for bonds, the outlook for equities is more uncertain."
Haefele did say, however, that he still sees a "path to markets ending the year higher. Although there is widespread criticism, it's too early to take the view that the Fed won't be able to negotiate the fine line of reducing inflation without derailing growth."
Read Barrons.com: Why a Long/Short Fund Is Betting on Energy, Chips, and Tesla Stock
Stocks to Watch:
Microsoft confirmed Tuesday that hacking group Lapsus$ managed to gain "limited access" to its systems just hours after Okta confirmed it was a target of the same group.
The tech giant said it has been actively tracking the group in recent weeks, noting that it is known for "using a pure extortion and destruction model without deploying ransomware payloads," in a blog post Tuesday.
Lapsus$ claimed this week to have gained access to Microsoft and exfiltrated portions of source code.
"Our investigation has found a single account had been compromised, granting limited access," Microsoft said in the blog post. "Our cybersecurity response teams quickly engaged to remediate the compromised account and prevent further activity." Microsoft noted that viewing source doesn't lead to elevation of risk.
Forex:
The dollar is likely to get a boost from the market raising its expectations for U.S. interest rates, according to ING analysts. "The futures market is fully pricing in 75 basis points of tightening in the next two meetings, which implies at least one 50bp increase."
That should offer the dollar a "positive undercurrent," particularly against low-yielding currencies and European currencies exposed to the Ukraine war, the analysts said.
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Expectations that the European Central Bank will raise interest rates by more than previously thought is capping the euro's depreciation against the dollar after the Fed signalled more aggressive rate rises, Monex Europe said.
Markets are now pricing in about three rate rises by the ECB within the next 12 months after the central bank accelerated the removal of stimulus at last Thursday's meeting despite uncertainty over the Ukraine crisis.
"This has shielded the euro from further downside against the dollar in Monday's and Tuesday's session, and is likely to serve as a backstop for the euro in the months ahead in an environment where U.S. yields are rising."
Bonds:
Bond yields rose for a second day, with the yield on the 10-year Treasury hovering around 2.4%. Less than a week ago the 10-year yield was at 2.14%.
Commodities:
Oil prices were higher, with Joe Biden and NATO allies expected to announce additional sanctions on Russia when they meet in Brussels this week.
Read: Jamie Dimon tells Biden that U.S., Europe Need 'Marshall Plan' for Energy Independence
TODAY'S TOP HEADLINES
Amazon Union Vote Set to Begin in New York, Which Has Challenged Company in Past
Amazon.com Inc. over the next month will face union elections at separate warehouses in New York City, a union-friendly area that has challenged the e-commerce giant in the past.
Current and former workers at the company's largest Staten Island warehouse are leading the effort to become the first group of Amazon employees to unionize in the U.S. They are operating without the backing of a major labor union, an uncommon tactic, but one that organizers believe will win support from workers.
Judge Frees China's ZTE From Some U.S. Oversight
HONG KONG-A U.S. judge ruled that ZTE Corp.'s probation for violations of U.S. sanctions on Iran could end, freeing the Chinese technology company from some oversight following years of government supervision.
The decision by the federal judge in Texas effectively ends ZTE's five-year term of supervision under a Dallas lawyer assigned to police the company's adherence to the terms of its 2017 settlement agreement resolving the sanctions charges.
China, Hong Kong Covid Restrictions Exacerbate Earnings Reporting Delays
Strict measures aimed at curbing the spread of Covid-19 in China and Hong Kong are having knock-on effects in ways that wouldn't immediately spring to mind, including causing the delay of audited earnings results.
The delays, affecting heavily indebted China Evergrande Group as well as property peers and companies operating in several other sectors, mean not only that investors and analysts will have to wait for 2021 results; it also means that shares of some affected companies are days away from automatic trading suspensions, effectively taking them out of the market at a time of heightened volatility and uncertainty.
Disney Workers Walk Out to Protest Company's Response to Florida Bill
Small groups of Walt Disney Co. employees across the U.S. took Tuesday off from work and gathered to protest what they described as the company's continued failure to support LGBT employees.
The walkouts mark the beginning of a third week of turmoil inside the entertainment giant as its leadership struggles to contain fallout from its bungled response to a Republican-led education bill in Florida, which many employees said targeted the LGBT community.
GameStop's Stock Rises After Chairman Buys More Shares
Shares of GameStop Corp. rose 16% in after-hours trading after the videogame retailer's chairman disclosed his firm bought 100,000 shares of the company's stock on Tuesday.
Ryan Cohen's RC Ventures LLC said it paid between $96.81 and $108.82 for the shares it purchased Tuesday. Mr. Cohen owns an 11.9% stake in the retailer, or 9.1 million shares.
Starbucks Workers Vote to Unionize in Seattle Store
A Starbucks Corp. store in Seattle voted to unionize Tuesday, the first in the coffee chain's hometown to seek representation from a growing union of chain baristas.
Chain workers at a single Seattle location voted 9-0 to be represented by the Starbucks Workers United union. Starbucks had petitioned the National Labor Relations Board to review that vote's structure ahead of Tuesday's tally. The federal labor agency denied the appeal, as it has done in response to other review requests by the company so far.
Quantum Startup Sandbox Emerges From Alphabet
Sandbox AQ, a software startup developing quantum-computing and artificial-intelligence tools for commercial use, on Tuesday officially spun off from Alphabet Inc.'s Google to become a stand-alone company.
The move was fueled by a "nine-figure" funding round that included Breyer Capital, T. Rowe Price Associates Inc. and Guggenheim Partners LLC, among other investors, the company said. The amount and terms of the deal were not disclosed.
Tencent's Fourth-Quarter Revenue Grew at Slowest Pace in Nearly Two Decades
Tencent Holdings Ltd.'s fourth-quarter revenue growth slowed to its weakest pace in nearly two decades, the latest sign of a severe slowdown in China's technology sector amid the country's weakening consumption and a yearlong regulatory crackdown.
The world's largest videogame developer's revenue rose 7.9% to 144.19 billion yuan ($22.65 billion). The result missed expectations of analysts polled by FactSet and marked the company's worst top-line growth since it went public in 2004.
Fed Officials Lay Out Case for Further Rate Rises
Federal Reserve Bank of Cleveland President Loretta Mester said Tuesday the U.S. central bank has quite a few rate rises ahead of it as it seeks to lower very high levels of inflation.
"In my view, inflation, which is at a 40-year high, is the No. 1 challenge for the U.S. economy at this time," Ms. Mester said in a speech text.
High Gasoline Prices Have Consumers Thinking Electric
With gasoline prices setting records across the U.S. and oil topping $100 a barrel, consumer interest in electric vehicles and other clean energy technologies is speeding up.
Gasoline prices, which hit a nationwide average record high of $4.33 on March 11, are about $1.35 higher than they were a year ago, according to AAA. Every dollar of higher gasoline prices adds more than a $50 increase in households' monthly expenses, according to Northern Trust.
U.S., U.K. Strike Trade Deal to End Tariffs on British Steel and American Whiskey
WASHINGTON-The U.S. and U.K. struck a trade accord Tuesday that will remove U.S. tariffs on British steel and aluminum, while the U.K. will lift levies on American whiskey, motorcycles and tobacco.
Biden administration officials said the agreement with the U.K. will allow the U.K to ship "historically-based sustainable volumes" of steel and aluminum products to the U.S. without levies imposed under the former Trump administration.
Global Finance Watchdog Warns of Risks Posed by Migrant Smuggling
Countries must do more to understand the money-laundering and terrorist-financing risks posed by the clandestine business of migrant smuggling, a global finance watchdog said Tuesday.
Over the past decade, political instability, poverty and the effects of climate change have led to more migrants and refugees, fueling the growth of an illegal industry with annual profits exceeding $10 billion, according to a new report by the Financial Action Task Force.
U.K. Inflation Rate Hit 6.2% in February, a 30-Year High
Inflation in the U.K. reached a new three-decade high in February, accelerating to a 6.2% annual rate, and is expected to rise further in the coming months on higher energy and other commodity prices.
(MORE TO FOLLOW) Dow Jones Newswires
03-23-22 0601ET
