Traders work on the floor of the New York Stock Exchange (NYSE) in New York on September 26, 2022.
Brendan McDermid | Reuters
Here is the key news investors need to start their trading day:
1. Stocks are trying to shake it off again
US stock futures headed for a higher opening Tuesday after suffering yet another tumble the previous day. Stocks are on a five-day losing streak and the blue-chip Dow Jones industrial average is in a bear market, having fallen more than 20% from its all-time high. The Cboe volatility index, also known as the VIX or “fear measure,” hit Monday’s highest level since mid-June, the last time markets were on the pits this year. In the Fed world, where policymakers are trying to quell price increases with rate hikes, Cleveland Fed President Loretta Mester said inflation is “unacceptably high.” Chicago Fed President Charles Evans, meanwhile, said he was a little nervous about how quickly and boldly the Fed is moving, but noted that he was “cautiously optimistic” that the US could avoid a recession.
2. What’s going on in the UK?
British Prime Minister Liz Truss, who took office in September, has announced a comprehensive program of economic reforms.
David Dee Delgado | Reuters
For one thing, it’s a mess, and that can be good something worse. The government of Britain’s new prime minister, Liz Truss, has unveiled a debt-financed ‘trickle-down’ stimulus package that historically includes massive tax cuts. The Bank of England, meanwhile, has been reluctant to raise interest rates to combat rising inflation, although it plans to reduce its balance sheet. Lenders also do some mortgage deals. The economic plan unveiled on Friday sparked a sharp sell-off in UK markets as the pound slumped against the dollar. Analysts and pundits have said there is no evidence the package would boost the economy. Some have warned of a possible crisis. Former US Treasury Secretary Larry Summers has been particularly harsh, warning that inflation would rise during recent stimulus surges. “A currency crisis in a reserve currency could well have global consequences. I’m surprised we haven’t heard from the IMF,” he said.
3. Voices of suspicion in Ukraine
Drone footage shows long lines of vehicles en route to exit Russia at its border with Georgia in Verkhny Lars, Russia September 26, 2022 in this still image extracted from video.
The Insider | via Reuters
Tuesday is the final day of elections in the Russian-occupied territories of Ukraine, where people are reportedly being coerced and forced to vote to join Russia. Western officials and political analysts have called the polls illegitimate as the Russian government wants to claim it annexed more of its former Soviet neighbor. Elsewhere, Russian President Vladimir Putin’s push to call up 300,000 reservists has met with resistance. Men are fleeing, protests have erupted and a man has been arrested for shooting dead a draft officer. Read more updates about the war in Ukraine here.
4. Biden’s offer to boost competition
U.S. President Joe Biden, seated between Secretary of Defense Lloyd Austin and Secretary of Health (HHS) Xavier Becerra, halts on April 26, 2022.
Jonathan Ernest | Reuters
Hometown Deli, Paulsboro, NJ
Mike Calia | CNBC
“The pastrami must be amazing.” With those words in a letter to investors, hedge fund honcho David Einhorn ushered in a period of public fascination with the so-called $100 million New Jersey deli and the publicly traded shell company that owned it. the saga, CNBC chronicled in the months following Einhorn’s letter took its most drastic turn yet on Monday. Federal prosecutors said they charged three men with stock manipulation and fraud dating back to 2014 and centered on the now-closed Your Hometown Deli store in Paulsboro. The SEC also sued the men over the alleged plan. After the news of the indictment broke, Einhorn got involved again. “I guess the pastrami wasn’t great,” he tweeted. “I’ve never really had a chance to try.”
– CNBC’s Jesse Pound, Elliot Smith, Holly Ellyatt, Chelsey Cox and Dan Mangan contributed to this report.
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