OPENING CALL
Stock futures rose on Wednesday as investors awaited Jerome Powell's testimony before Congress.
Traders will be keen to see whether Powell reinforces recent statements by Fed officials that the central bank is minded to wait and see if inflationary pressures continue to subside before starting to cut interest rates.
Other Fed speakers on Wednesday include Mary Daly and Neel Kashkari.
Overseas Markets
Global markets were mixed, as Chinese mainland indexes slipped, while the Hang Seng Index climbed 1.7%. Europe's Stoxx 600 rose.
Premarket Movers
Box was rising 2.8% after the company announced an integration between its document storage and management system with Microsoft's Azure OpenAI service.
ChargePoint fell 7%. It reported Wednesday shrinking revenue and a near-$95 million loss, worse than a year earlier.
Coinbase rose 6% on the back of continuing high demand for bitcoin.
Couchbase was rising 8.3% after fourth-quarter revenue jumped 20% and the company said it expects first-quarter revenue of $48.1 million to $48.9 million, better than estimates of $47 million.
CrowdStrike forecast another year of sharp revenue growth and posted fourth-quarter earnings that beat analysts' estimates. The stock was up about 24%.
Palo Alto followed CrowdStrike higher in the premarket, gaining 4.3%. SentinelOne added 8.4%, Zscaler gained 4.2%. CyberArk advanced 4.3%, as did Fortinet.
Nordstrom was down more than 9% after its full-year sales forecasts disappointed investors.
Oddity Tech reported fourth-quarter adjusted earnings that beat expectations and issued guidance for the current fiscal year that was better than anticipated. The stock, however, was falling 11%.
SoFi Technologies was up 3.6% in premarket trading. Shares fell 15% on Tuesday, its worst single-day percentage decline on record, after it announced plans to offer $750 million of convertible senior notes due in 2029.
Watch For:
Bank of Canada interest rate decision; Fed Beige Book; EIA Weekly Petroleum Status Report; ADP National Employment Report; Earnings from Campbell Soup, Foot Locker, Brown-Forman, Abercrombie & Fitch,
Today's Top Headlines/Must Reads:
- Why Gold and Bitcoin Are Hitting Record Highs-but Won't Stay There Long
- The Blacklisted Component That's Disrupting the Luxury-Car Market
- The Nvidia Chips Inside Powerful AI Supercomputers
MARKET WRAPS
Forex:
Powell's testimony before Congress should boost the dollar if he sticks to a cautious tone, stressing there is no hurry to cut interest rates due to strong economic data and still-elevated inflation, UniCredit said.
"We expect Powell to strike a cautious tone again with regard to the timing of a first Fed rate cut, and such a prospect might be positive for the dollar across the board."
Although the DXY dollar index remains below 104, "there is a lack of heavy selling pressure," UniCredit added.
The euro is expected to firm against the dollar on a three-month to 18-month horizon, as the eurozone economy gradually recovers while the U.S. economy-so far very buoyant-shows signs of deteriorating, Natixis Research said.
It expects EUR/USD to rise to 1.105 in three months, to 1.125 by the end of the year, and to 1.140 in 18 months.
Bonds:
The Treasury yield curve should continue to steepen, regardless of what the Fed announces regarding scaling back quantitative tightening, Saxo said.
The Fed could decide on this as early as its next meeting on March 20, opting either to taper quantitative tightening or for a reverse 'Operation Twist'--a previous policy of selling short-term bonds to purchase long-term Treasurys--or a mixture of the two, it said.
"Regardless of the chosen option, the yield curve will continue to steepen," Saxo added.
This should benefit short-dated Treasurys, sending yields lower, while longer-dated Treasurys "remain vulnerable to pandemic-like Treasury issuance, the pace of disinflation and term premium considerations."
Energy:
Oil prices rose on signs of supply tightness and OPEC+'s cuts slowly making their way through the market.
"The announcement over the weekend that the OPEC+ alliance announced it would extend its voluntary production cuts of roughly 2 million barrels a day until the end of the June quarter will likely see impact only get greater," ANZ said.
Meanwhile, Arabia raised the April official selling price for its flagship Arab Light crude to Asia to $1.70 a barrel, more than the Oman/Dubai average of $1.50 a barrel in the previous month, Reuters reported, citing trade sources.
Metals:
Gold slipped back after hitting a record on Tuesday, but bullion's performance will likely be capped until there is a clear sign of Fed monetary easing, Sucden Financial said.
TODAY'S TOP HEADLINES
TikTok Faces U.S. Ban in New Draft Bill
TikTok, the short-video platform owned by Chinese internet company ByteDance, is facing renewed political pressure in the U.S. from a draft bill that could lead to a ban of its popular video-sharing app.
The bill, introduced in Congress on Tuesday, calls for Beijing-based ByteDance to divest itself of TikTok or face the platform being banned from app stores and web-hosting services in the U.S. ByteDance would have a little more than five months from the enactment of the bill to comply.
BYD Cuts Starting Price of Cheapest Electric Car Amid Fierce Competition
BYD unveiled an updated version of its cheapest electric car model, Seagull, and further slashed its starting price, deepening a price war amid rising competition in China, the world's largest car market.
The Chinese electric-vehicle company lowered the starting price of its updated version of Seagull by around 5% to 69,800 yuan ($9,698) on Wednesday.
Beijing Hints at More Liquidity Support, Makes Surprise Trade-Data Disclosures
Beijing signaled more liquidity support for the country's stumbling economy, and senior officials made unexpected trade-data disclosures, marking a new trend of surprise policy and data announcements.
People's Bank of China Gov. Pan Gongsheng said at a briefing Wednesday that there is room to cut banks' reserve requirements, pledging to prop up consumer prices and keep the yuan stable.
Why You Shouldn't Trust Chinese Growth Data
On Tuesday, China's ruling Communist Party announced this year's growth target would be around 5%. Achieving that would not be easy, Premier Li Qiang acknowledged. Still, he boasted the country had faced " an array of interwoven difficulties" last year and still posted growth of 5.2%, "ranking China among the fastest-growing major economies in the world."
How does China grow 5% despite so many headwinds, from collapsing property investment to declining population? Very likely, it doesn't. Actual growth is probably slower, perhaps a lot slower.
Bitcoin Could Be a Smart Play in Tumultuous Times
Bitcoin and gold might be the surprise winners of a divisive U.S. presidential election.
Buying crypto or gold could be viewed as a political statement because the value of each benefits from troubles with the established order. Gold has long been considered an asset of last resort that is immune to inflation, and that retains value even if fiat currencies are debased by central banks.
Nikki Haley to Exit Republican Presidential Race
Nikki Haley plans to suspend her Republican presidential primary bid in a speech Wednesday morning, people familiar with her plans told The Wall Street Journal.
The former South Carolina governor and United Nations ambassador is expected to make an appearance to deliver brief remarks in the Charleston area around 10 a.m. ET. Her decision arrived the day after Super Tuesday, when she won only Vermont among 15 states that held GOP contests.
Biden vs. Trump: A Familiar Matchup in an Unprecedented Election
WASHINGTON-With the last embers of the Republican primary extinguished after Super Tuesday, the country is lurching into a new phase in the 2024 presidential election: a one-on-one matchup between President Biden and former President Donald Trump that is unlike any other contest in modern history.
The last Republican challenger, former South Carolina Gov. Nikki Haley, plans to suspend her Republican presidential primary bid in a speech Wednesday morning, people familiar with her plans told The Wall Street Journal. The former president is on track to clinch the GOP nomination as soon as next week, while Biden is sailing toward the Democratic nomination again.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings [4Q Unless Stated Otherwise]:
AirBoss of America
Altius Renwbl Rylts.
Argonaut Gold
Aris Mining
Constellation Sftwr.
Converge Tech Sltns
Curaleaf Hldgs
Descartes Sys Gp
Fortuna Silver Mines
Kits Eyecare
Linamar
Savaria
SilverCrest Metals
Sleep Cntry Canada
Tourmaline Oil
VersaBank 1Q
Economic Events (ET):
0830 Q4 Labour productivity, hourly compensation & unit labour cost
0945 Bank of Canada interest rate announcement
1000 Feb Ivey Purchasing Managers Index
Stocks to Watch:
Ag Growth International 4Q Rev C$379.3M
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Andlauer Healthcare Group 4Q Net C$18.6M; 4Q Rev C$169.1M
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Calian Group: Strengthens Nuclear Capability With Acquisition of MDA Ltd. Nuclear Assets; MDA's Nuclear Team Will Be Integrated Into Calian's Existing Nuclear Business Within Its Advanced Technologies Segment
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Canfor Corp 4Q Loss/Shr C$0.98; 4Q Adj Loss/Shr C$1.06; 4Q Loss C$117.1M; 4Q Sales C$1.28B
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Canfor Pulp Products 4Q Loss/Shr C$0.20; 4Q Loss C$13.2M; 4Q Sales C$193.9M
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Franco-Nevada 4Q Loss/Shr $5.11; 4Q Rev $303.3M; 4Q Adj EPS 90c
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Melcor REIT 4Q Rev C$18.50M Vs. C$18.80M; YTD Rev Steady at C$73.90M Vs C$74.11M
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Pollard Banknote 4Q Sales C$135.5M; Raises Quarterly Dividend to C$0.05 Vs. C$0.04; 4Q EPS C$0.41
Other News:
(MORE TO FOLLOW) Dow Jones Newswires
03-06-24 0636ET
