4.06pm: Equities mixed after Fed minutes
US markets recovered towards the closing after the Federal Reserve issued the latest update from the January meeting, while the Russia-Ukraine escalation continued to build geopolitical unrest.
At the closing, the Dow Jones Industrial Average lost 0.1% or 54 points, at 34,934, alongside the tech-heavy Nasdaq Composite that shed 0.1%, closing at 14,124, while the S&P 500 closed with flatline percentage change or 4 point gain at 4,475.
The Fed minutes did not point at any hastened moves for interest rate hikes, however, affirmed to investors that the central bank will “soon” raise interest rates as early as next month.
12.10pm: Markets lower amid upbeat retail data
US stocks continued to plunge around midday on Wednesday amid Russia-Ukraine deescalation, as investors assessed strong retail sales data and awaited the release of minutes from the Federal Reserve's last meeting.
By noon, the Dow Jones Industrial Average had shed 0.6%, or 213 points, at 34, 776, while the tech-laden Nasdaq Composite and the broader S&P 500 lost 1% and 0.5%, respectively.
The latest upbeat US retail sales data revealed a sharp rebound in January as purchases of motor vehicles and other items surged, with higher prices adding to pressure on economic growth.
“These retail numbers showed that, despite weak consumer confidence, spending rebounded at its fastest rate in 10 months in January, rising by 3.8%, well above expectations of 2%,” said Michael Hewson chief market analyst at CMC Markets UK. “The biggest gains were in online sales, as well as furniture, autos and building materials as US consumers spent money on improving their homes and upgrading their cars.”
Hewson noted that today’s lower open may well also be due to an abundance of caution over the upcoming Fed minutes, “where we could get further clues over policymaker thinking on balance sheet reduction, as well as the thorny topic of 25bps, or a 50bps rate hike in March.”
In Canada, inflation rose to 5.1% in January, its highest level since September 1991, driven by prices of housing, gasoline, and groceries. The Bank of Canada is expected to hike interest rates at its next meeting due in two weeks.
On the corporate front, Airbnb (NASDAQ:ABNB) shares jumped 5.5% following the release of fourth-quarter numbers after-hours on Tuesday which saw revenues come in at $1.53 billion, well above expectations of $1.46 billion, and the firm swinging to a profit of $55 million.
“For Q1 revenue guidance also came in above expectations with the company saying it expects to see $1.41bn to $1.48bn, as more properties become available, and more people go down the Airbnb route for holiday stays,” noted Hewson.
Chipmaker Nvidia will be publishing its Q4 numbers later today and analysts expect to see a significant improvement on its performance in Q3.
The launch of a new suite of chip products called the Omniverse is also expected to drive revenues in this area in the coming quarters. For Q4, the company has said it expects revenues of $7.4 billion, with profits expected to come in at $1.22 a share.
10am: Proactive North America headlines:
Meta agrees to pay US$90mln in decade-long privacy suit
BioVaxys says studies on BVX-0320, its haptenized SARS-CoV-2 s-spike protein vaccine, suggest superior cardiac safety
CO2 GRO forecasts 2022 revenue of $1.5M-$2.5M, building on 2021 growth momentum
Trillion Energy hires Schlumberger to provide services for new well drilling in Black Sea
Mandalay Resources boosts gold resources and reserves at Costerfield and Bjorkdal projects
Safe-T Group (NASDAQ:SFET) launches new ‘Malvertising’ protection product for Apple iOS devices
Skye Bioscience reports positive results for SB-100 in GLP toxicology study; Phase I clinical trial expected in 2Q 2022
Renforth Resources broadening exploration efforts at Surimeau project to include lithium
Dalrada Clean Energy Board adds technology advisor William Davidson
Mydecine Innovations announces inclusion of molecule with improved heart-safe microdose properties in its family of psilocin analogs
ImagineAR says wrestling champion Ric 'Nature Boy' Flair hologram e-greeting available on FameDays.com
Golden Minerals hits high-grade gold and silver at its Yoquivo project in Mexico
Plurilock says 2022 should be “transformational” as it scales its technology offerings to a growing customer base
BioHarvest Sciences trademarks its breakthrough non-GMO proven platform technology 'Bio-Plant CELLicitation'
Electra Battery Materials says its cobalt refinery remains on budget and on schedule for commissioning this December
Codebase Ventures appoints blockchain engineer Manan Mehta as senior technology advisor
Talon Metals reduces existing net smelter royalty on world-class Tamarack asset to 1.85% for US$4.5M in cash
Revive Therapeutics receives Orphan Drug Designation for Bucillamine in the prevention of ischemia-reperfusion injury during liver transplantation
DRDGOLD declares 20 cents per share interim dividend after gold production exceeds forecasts
East Side Games Group (TSX:EAGR, OTCQB:EAGRF) says East Side Games studios, which the company acquired in February 2021, has achieved revenue milestones
Clean Power Hydrogen shares rise 30% on first day of trading on AIM
9.42am: US stocks in the red at open
US stocks started, as expected, lower midweek as markets look to the release of the Fed minutes later today and continue to monitor the Ukraine-Russia situation.
The Dow Jones Industrial Average started down 89 points at 34,899 in New York.
The S&P 500 lost 16 points to go to 4,454. The technology stock laden Nasdaq shed over 115 points at 14,023.
Craig Erlam, market analyst at Forex group Oanda said: "I'm not sure what we'll learn from the Fed minutes later today that we're not already aware of, with numerous policymakers expressing increasingly hawkish views in recent weeks.
"Few have been as hawkish as James Bullard who's called for a full percentage point of increases before July and raised the prospect of inter-meeting hikes. I expect the minutes will reflect the ongoing hawkish evolution at the central bank but it shouldn't shift the dial as far as markets are concerned, with six hikes already priced in."
On the data front, US Industrial production climbed 1.4% in January this year, after a slight 0.1% decline in December, the Federal Reserve reported. This was well above Wall Street expectations for a 0.5% gain last month.
6.30am: US stocks seen opening down
US stocks are expected to open lower as investors turn their attention back to how the Federal Reserve plans to curb soaring inflation as tensions on the Russia-Ukraine border ease.
Futures for the Dow Jones Industrial Average declined 0.18% in Wednesday pre-market trading, while those for the broader S&P 500 index fell 0.16% and the tech-heavy Nasdaq shed 0.13%.
Stocks broke a three-day losing streak on Tuesday, ending sharply higher after the Russian Defense Ministry said it had begun pulling back some of its troops after training exercises near the Ukrainian border.
At the close, the Dow gained 1.22% to 34,989, while the S&P 500 added 1.58% to 4,471 and the Nasdaq climbed 2.53% to 14,140.
Today sees the release of the minutes of the Federal Open Market Committee’s most recent meeting which may indicate that the Fed is ready to accelerate interest rate increases to rein in inflation.
“One of the twin pressure valves gripping the market has been slightly released, while the other remains strongly in evidence,” commented Richard Hunter, head of markets at interactive investor.
“Apparent signs of a de-escalation of tensions between Russia and Ukraine lifted sentiment, while also resulting in a drop in the oil price on the back of lesser supply concerns. The withdrawal of some Russian troops seems to have been accompanied by comments that the door remained open for diplomatic discussions, which was sufficient to prompt a relief rally.
“On the other hand, the current elevated level of inflation remains a real concern on both sides of the pond.”