Wall Street heading for a green start

ABM
Wednesday 11 January 2023 14:57

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US stock markets open slightly higher on Wednesday in anticipation of an inflation reading on Thursday.

Futures on the leading S&P 500 index are 0.3 percent in the green about half an hour before the open.

The market marks time after a strong start to the year.

Investors are curious to see if Thursday’s inflation report confirms that inflation continues to fall and gives the Fed room to ease monetary policy soon.

“Investors appear to be pricing in expectations that inflation will continue to fall,” Hargreaves Lansdown said. There is a limit to the optimism, according to market analysts.

Economists expect inflation to fall from 7.1 to 6.5 percent.

Fed officials stressed this week that they are willing to continue aggressively raising interest rates to ensure that inflation is brought under control, even at the expense of growth.

That’s why many Fed officials will comment on Thursday’s inflation rate.

The price of oil is rising. A February West Texas Intermediate future is up 1.5 percent at $76.22, while a March Brent future is up 1.5 percent at $81.31.

Euro/dollar is quoted at 1.0746. At the close of US stock markets on Tuesday, there was 1.0735 on the boards. The options market shows that investors are far less likely to bet on a fall in the euro against the dollar, ING said.

Company news

Bed Bath & Beyond plans to lay off even more staff to further cut costs after the company’s liquidity and earnings further deteriorated in the latest quarter. The stock looks set to open 28 percent higher.

Blend Labs will save more than $100 million in costs, including by sending 28 percent of its employees back home to America. The stock looks set to open 6 percent higher.

Rivian Automotive has said goodbye to a number of top executives after production targets were not met in 2022. Shares rise 1 percent before the stock market.

Warner Brothers Discovery is up 3 percent in premarket trading, with an opening indication of $12.93. Bank of America issued a buy rating with a $21 price target.

Tesla is considering a $775 million plant expansion in Texas. It’s a sign the electric carmaker is looking to keep growing despite investor concerns about declining demand for Elon Musk’s company’s cars.

Apple was least affected by the sharp drop in computer shipments during the holiday season, according to data from the International Data Group. Worldwide, the number of computers fell by 28 percent to 67.2 million units in the fourth quarter of last year.

The airlines are slightly lower with a minus of 1.4 percent for Southwest Airlines. Due to an FAA malfunction, flight information is not available to pilots and cabin crew in the United States. United Airlines would have suspended all domestic flights.

Quarterly earnings season kicks off Friday with a number of major U.S. banks, including JPMorgan Chase and Bank of America. Analysts on average expect a 15 percent lower profit for the banks, which would still be $28 billion.

Wells Fargo must drastically cut its mortgage lending after a series of scandals and a record fine. The bank mainly focuses on existing customers and will no longer work with intermediaries.

Lock positions

Wall Street closed higher on Tuesday. The S&P 500 index closed 0.7 percent higher at 3,919.25 points and the Nasdaq technology index rose 1.0 percent to 10,742.63 points. The Dow Jones index rose 0.6 percent to 33,704.10 points.



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