Stocks fall as Wall Street prepares for Fed rate decision

shares of rogers corpThe engineering materials maker broke on Wednesday after the company’s $5.2 billion sale plan dupont de nemours was terminated.

“Rogers is currently evaluating all options to determine the best course of action in response to DuPont’s notice,” the company said in a statement.

DuPont said after Tuesday’s shutdown that companies have been unable to obtain timely approvals from all necessary regulators. The deal was first announced on November 1 last year.

Rogers’ shares fell more than 43%, while DuPont’s stock gained nearly 6%.

Stocks opened lower as Wall Street awaits the Fed’s latest policy decision.

The Dow Jones Industrial Average fell 95 points, or about 0.3%. The S&P 500 futures and Nasdaq Composite lost 0.3% and 0.2%, respectively.

— Samantha Subin

Investors in the fed funds futures market are betting that the Federal Reserve will raise its fed funds rate above 5% before stopping rate hikes next year.

The Federal Reserve is meeting Wednesday and is expected to raise its fed funds rate by 75 basis points when it releases a policy statement at 2 p.m. ET.

The May contract was up 5.02% on Wednesday morning. The Fed is currently targeting fed funds in the 3% to 3.25% range.

“Over the past two weeks, it’s jumped about 5%,” said BMO rate strategist Ben Jeffery. He said the futures market is also pricing for an increase of 75 basis points for Wednesday afternoon and is giving a 50/50 plus margin for an increase of 50 basis points in December. One basis point is equal to 0.01 of a percentage point.

“The base case is 75 today, 50 in December and 25 in February,” Jeffrey said.

Market professionals expect the Fed to also signal on Wednesday that it may begin raising rates at a slower pace starting in December.

That signal could come from Fed Chairman Jerome Powell as he speaks to the media at 2:30 p.m. ET.

Wells Fargo’s Michael Schumacher said, “Until we hear from Powell at 2:30, I think it’s just noise.”

– strip dome

Shares of Chinese companies listed in the US surged again during premarket trading on Wednesday amid rumors that China may pivot from its strict zero-Covid policy.

KraneShares CSI China Internet ETF Gained more than 2%, building on Tuesday’s 5.5% advance. iShares China Large-Cap ETF Added about 1%.

including individual stock Alibaba And pinduoduo Added 1% each.

— Samantha Subin

According to KeyBanc Capital Markets, this holiday season, the toy industry will not see double-digit growth in the past two years.

Toy sales in 2020 and 2021 were driven by incentives, increased savings and stay-at-home activity.

“We believe the current macroeconomic uncertainty, inflationary pressures and restrictive financial conditions create a more difficult environment,” analyst Bradley Thomas wrote in a note on Tuesday.

Consumers are already withdrawing from discretionary purchases target And walmart This year, he noted. mantel And Hasbro Recently also said that they are preparing for more promotions than last year.

Thomas believes Ollie’s Bargain Outlet Holdings This season is best positioned due to its high-quality and strong inventory and closeout deals.

— Michelle Fox

Companies reporting earnings results were among the stocks making the biggest moves during Wednesday’s premarket.

Paramount Global — The media company’s stock tumbled 8% in the premarket after it missed top and bottom line expectations for the most recent quarter.

Caesars Entertainment — Caesars stock gained 7.7% in premarket trading, as the resort operator topped analyst estimates for both the top and bottom lines. Kaiser also said that its digital betting business turned profitable on an adjusted basis for the quarter, 12 months ahead of the company’s target.

Estee Lauder – The cosmetics maker’s stock sank 9.5% in premarket trading after issuing a weaker-than-expected outlook. Estee Lauder cited high costs, a strong US dollar and the Covid lockdown in China as reasons for the disappointing forecast.

– Peter Shacanoe, Samantha Subin

The ADP employment report for October showed that the private labor market is maintaining its strength despite a hike in interest rates and the Federal Reserve looks to quell high inflation.

Private sector employment increased by 239,000 in October, Wednesday’s report showed. The services sector added a large number of jobs during the month, with large gains in hiring in leisure and hospitality and transportation, trade and utilities.

In addition, annual pay was up 7.7% year on year, but the pace of wage gains is slowing, according to the report. Those who changed jobs received a 15.2 per cent salary increase in October, up from 15.7 per cent in September.

The ADP report comes just days before the Bureau of Labor Statistics released October non-farm payrolls.

—Carmen Renicke, Jeff Cox

shares of Advanced Micro Devices Posting the results after Tuesday’s bell, premarket trading rose 6%, having missed both the top and bottom lines.

While the chipmaker fell short of Wall Street’s expectations for its fiscal third quarter, revenue from all four of its business segments came in ahead of what the company had forecast in its October warning.

AMD reported adjusted earnings of 67 cents per share on $5.57 billion in revenue. Analysts polled by Refinitiv had forecast earnings of 68 cents per share on $5.62 billion in revenue.

On a year-over-year basis, revenue increased 29%.

– Samantha Subin, Jordan Novett

Wheat futures fell sharply on Wednesday morning after Russia announced the resumption of grain exports to the Black Sea.

Russia withdrew from an export deal over the weekend, but said on Wednesday it had received assurances from Ukrainian officials that the shipping lanes would not be used for military purposes. Ukraine is a major global wheat exporter, and Russia’s invasion has disrupted supplies.

Wheat futures in Chicago fell 6% on Wednesday, though they are still higher in the week. Maize futures fell nearly 2 per cent.

– Jesse Pound, Holly Aliata

Mortgage demand was flat, with application volume down 0.5% compared to the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

Meanwhile, rates fell slightly, but remained close to a 22-year high.

Refinance applications rose 0.2% for the week, but are still down 85% year over year. Mortgage applications for home purchases declined by 1%. This shows a decline of 41% compared to the same week last year.

– Diana Olick, Samantha Subin

shares of twilioThe company, which makes programmable tools that allow businesses to send and receive calls and texts, reported a nearly 4% drop in pre-market trading.

The dip followed a double-downgrade from Bank of America and a cut in the price target for the stock. While the bank still expects the share price to rise 13% in the next year, it is lower than the previously expected 133%.

Bank of America’s downgrade comes on the back of a survey showing that more than half of respondents plan to spend the same or less on the company’s platform in 2023 than this year.

CNBC Pro subscribers can get the full story here.

Shares of CVS Health were up 5% after the pharmacy operator reported third-quarter earnings and revenue that beat expectations.

CVS earned $2.09 per share on revenue of $81.16 billion. According to Refinitiv, analysts expected earnings per share of $1.99 on revenue of $76.75 billion.

The company also raised its full-year outlook.

— Jack Stebbins

sales force Received an outperform rating from Macquarie, analyst Sarah Hindlian-Bowler noted that the company’s recent C-suite moves saved itself from 10 years of underperformance and placed it “down the Microsoft path”.

Additionally, the analyst thinks Salesforce is less likely to be impacted by global macro headwinds as it enters a period of “beautiful maturity.”

CNBC Pro subscribers can read the full story here.

— Alex Haring

Maersk, the world’s largest container shipping firm, posted record profits for the third quarter on Wednesday on the back of higher sea freight rates, but noted a slowdown in demand.

The Danish giant, widely viewed as a barometer for global trade, reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $10.9 billion for the quarter, well above consensus analyst estimates of $9.8 billion. above and nearly 60% higher than the same period. year ago.

CEO Soren Skow said this year’s “extraordinary results” were driven by continued increases in sea freight rates, but said it was clear these had reached the peak of “dark clouds on the horizon” and warned.

Read the whole story here.

– Elliot Smith

European markets remained cautious on Wednesday as global investors focused on the conclusion of the Fed’s policy meeting.

pan-European Stockx 600 Index London was partially higher by mid-morning, leaving an early gain of around 0.4%. Health care stocks rose 1.2% while autos declined 0.5%.

Ed Yardeny of Yardeni Research said Federal Reserve Chairman Jerome Powell could signal a 75-basis-point increase in December after the expected increase in November.

Following the expected increase in December, Powell may indicate that “the fed funds rate is now in restrictive territory, and they’re going to keep it there for a while, to see how it affects the economy.” ‘ he said on CNBC. Squawk Box Asia.”

Yardeny said he thinks the Fed wants to extend its hike instead of raising rates by 50 basis points, followed by two 25-basis-point hikes.

— Abigail Ngo

Goldman’s Jeff Curry says there is an investment that can protect investors from rising interest rates, inflation and geopolitical risk.

Curry, global head of commodity research at Goldman Sachs, said it has 20-30% growth potential in the short term, with additional upside risk to the price target.

CNBC Pro customers can read more here.

– Ganesh Rao

These are some of the companies that are making big moves in expanding business.

• Match Group – Shares of the dating app operator rose 16% after the company posted higher-than-expected revenue for the third quarter, according to StreetAccount.
• Airbnb — The lodging stock fell nearly 6.8% after hours even after the company reported better-than-expected quarterly earnings and revenue.
• Advanced Micro Devices – The chipmaker saw its shares rise more than 4%, with quarterly results for all four of its business segments better than the company said in its October warning.

Stock futures were flat Tuesday night as investors looked to another Federal Reserve at the conclusion of its two-day policy meeting on Wednesday.

Futures tied to the Dow Jones Industrial Average lost 20 points. S&P 500 futures and Nasdaq 100 futures traded just below the flat line.

– felt tired