Stock futures nudge higher will Powell, jobs data in focus; Powell speech may challenge Fed’s new rate hike outlook; Sam Bankman-Fried set for DealBook summit appearance after FTC collapse; Biogen shares jump after promising Alzheimer’s treatment data and HPE shares surge after Q4 earnings beat, solid near-term outlook.
Five things you need to know before the market opens on Wednesday November 30:
1. — Stock Futures Nudge Higher Will Powell, Jobs Data In Focus
U.S. equity moved higher Wednesday, while the dollar slipped lower against its global peers, as investors looked to a keynote address from Federal Reserve Chairman Jerome Powell later in the session while bracing for a series of job market data releases.
With stocks holding onto a solid November gain of around 2.15%, and set to enter what is traditionally the strongest month of the year in terms of annual performance, investors are hoping that Powell doesn’t strike too hawkish a tone ahead of PCE inflation data tomorrow and the Fed’s next policy meeting in mid-December.
At present, markets are pricing in a 70% chance of a 50 basis point rate hike next month, with the bulk of expectations pointing to a peak Fed Funds rate of between 5% and 5.25% by early spring before the central bank starts to pause its rate hiking cycle.
Jobs data will also play a key role in that assessment, with ADP’s November employment report due at 8:15 am Eastern time, followed by the October reading of JOLTs job opening at 10:00 am, which is expected to show that there are still some 10.3 million unfilled positions in the world’s biggest economy, a level many analysts say will still feed into wag increases and inflation pressures.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.36% lower in overnight trading at 106.437, suggesting again the currency traders are betting that inflation may have peaked in recent months, while benchmark 10-year Treasury note yields bumped to 3.74% in overnight trading.
Weaker-than-expected factory activity data from China, where PMI data showed a deep November contraction — to the lowest levels in 7 months — linked to Covid lockdowns and manufacturing closures, added to bets that Beijing will need to alter its strict stance in the months and weeks ahead.
China stocks booked modest gains on the session, while the region-wide MSCI ex-Japan benchmark rose 1.58% heading into the close of trading. In Europe, the region-wide Stoxx 600 was marked 0.62% following a slower-than-expected November inflation reading of 10%, while Britain’s FTSE 100 added 0.43% in London.
Heading int the start of the trading day on On Wall Street, futures tied to the S&P 500 are priced for a modest 8 point opening bell gain while those linked to the Dow Jones Industrial Average are indicating a 32 point bump. The tech-heavy Nasdaq is priced for a 44 point gain.
2. — Powell Speech May Challenge Fed’s New Rate Hike Outlook
Federal Reserve Chairman Jerome Powell is set to deliver a key policy speech today in Washington in what could be the last major address from a central bank official prior to its December rate-setting meeting.
Powell is slated to speak at 1:30 pm Eastern time at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy, inflation, and the changing labor market, with a question-and-answer session from the audience to follow.
Powell broke from the agreed Fed statement earlier this month, following the Fed’s fourth consecutive 75 basis point rate hike, by insisting to reporters that it was “too soon” to consider a pause in rate hikes despite the Open Market Committee’s clear indication small increases, with an eye towards peak rates, would likely be required over the coming months.
To that end, markets are likely to scrutinize the Fed Chair’s comments on both the strength of the labor market, with Friday’s jobs report looming, as well as the sense that inflation pressures are set for an accelerated retreat over the coming months.
3. — Sam Bankman-Fried Set For DealBook Summit Appearance After FTX Collapse
Sam Bankman-Fried, the founder and former CEO of the collapsed crypto exchange FTX, will appear on panel at the New York Times’ DealBook event later today in New York.
Bankman-Fried is expected to be pressed on the issue of whether FTX, through its wholly-owned Alameda hedge fund, used customer deposits to make risky bets, and extend loans — including $1 billion to Bankman-Fired himself — in the volatile crypto market. The U.S. Securities and Exchange Commission, as well as the Commodity Futures Trading Commission, are looking into similar allegations following the group’s Chapter 11 bankruptcy filing earlier this month,
Bankman-Fried may also shed light on the identify of the FTX’s largest creditors, the top 50 of which are owed some $3.1 billion, after a bankruptcy court judge agreed to keep their names secret for the time being. FTX’s collapse has already sparked contagion in the crypto lending market, and triggered the demist of lender BlockFi, and adding new names to the list of exposed entities could cause further market disruption.
4. — Biogen Shares Jump After Promising Alzheimer’s Treatment Data
Biogen, along with its Japan-based partner Eiasi, said the treatment, known as lecanemab, has a success rate of between 23% to 37%, compared with a placebo, in slowing the decline of cognition and daily function in the 1,800-patient trial.
Side-effects, however, were also observed in some 13% of those involved in the study, which included two fatalities linked to microhemorrhages in a separate study. Still, the Alzheimer’s Association has asked the U.S. Food & Drug Administration to approve the treatment, noting it can ” meaningfully change the course of the disease.”
Biogen shares were marked 2.23% higher in pre-market trading to indicate an opening bell price of $297.90 each.
5. — HPE Shares Surge After Q4 Earnings Beat, Solid Near-Term Outlook
Hewlett Packard Enterprise (HPE) – Get Free Report shares jumped higher in pre-market trading after the IT services group posted stronger than-expected fourth quarter earnings and issued an upbeat near-term outlook.
HPE said it expects to see bottom line earnings of between 32 cents and 40 cents a share for the three months ending in January, the group’s fiscal first quarter, after topping Street forecasts with adjusted fourth quarter earnings of 80 cents per share on revenues of $7.87 billion.
HPE, the services-focused division that was spun out of the former Hewlett Packard in 2015, said its entering a “very different phase” where the “combination of our rightsized cost structure and substantial order book is expected to deliver profitable growth that is increasingly recurring at higher margins as our as-a-service transformation continues to unfold.”
HPE shares were marked 3.5% higher in pre-market trading to indicate an opening bell price of $16.00 each.