Wall St set for slight rebound with focus on Fed speakers, economic data

  • Markets
  • Friday, 22 Sep 2023

WALL Street's main indexes were on track to open higher on Friday after concerns over interest rates battered stocks in the prior session, while investors awaited data and comments from policymakers to assess the Federal Reserve's next steps.

U.S. Treasury yields retreated after surging to multi-year highs on Thursday, driving a rebound in growth stocks including Apple, Amazon.com, Nvidia and Tesla, up between 0.8% and 1.5% in premarket trading.

Worries over another interest rate hike in 2023 and prospects of a delay in the easing of monetary policy knocked down the three main indexes by more than 1% on Thursday.

The benchmark S&P 500 and the tech-heavy Nasdaq were on track for their worst week since March after the U.S. central bank delivered a hawkish pause on Wednesday, dampening hopes for policy easing before 2025.

"I don't think that the markets have fully thought through the economic impact of higher rates," said Jason Pride, chief of investment strategy and research at Glenmede in Philadelphia.

"Higher rates mean higher cost of borrowing for everybody and should affect the marginal decisions to spend or grow businesses or employ people which should have a negative impact on the economy."

Traders' bets on the benchmark rate remaining unchanged in November and December stood at 73% and 58%, respectively, according to CME's FedWatch tool.

Investors will monitor flash reading of the S&P Global manufacturing and services PMI for September shortly after the opening bell for more clues on the path for interest rates and the health of the U.S. economy.

A slew of Fed policymakers, including Minneapolis President Neel Kashkari and board Governor Lisa Cook, both policy voting members, are set to speak at several events during the day.

The Detroit Three automakers are also in focus as they enter the final hours to reach new labor agreements with the union before the current strike expands to more plants.

At 8:30 a.m. ET, Dow e-minis were up 55 points, or 0.16%, S&P 500 e-minis were up 17 points, or 0.39%, and Nasdaq 100 e-minis were up 103.25 points, or 0.69%.

Activision Blizzard added 1.9% after Britain's antitrust regulator said the restructured $69 billion acquisition of the company by Microsoft "opens the door" to the biggest-ever gaming deal being cleared.

U.S.-listed shares of Chinese firms including PDD Holdings, JD.com, Li Auto and Baidu rose around 4% each on hopes of a rebound in economic growth, while Alibaba gained 4.4% on report the company's logistics arm Cainiao was planning to file for a Hong Kong IPO as soon as next week.

Wayfair rose 3.8% after Bernstein upgraded the online furniture retailer to "market perform" from "underperform", while Charter Communications advanced 1.6% after Wells Fargo upgraded the cable company to "overweight" from "equal weight". - Reuters

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