Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Fed Decision, ADP, Zhengzhou Lockdown - What's Moving Markets

Economy Nov 02, 2022 06:45AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
LCO
-1.01%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
UBER
-0.35%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
3420
+1.55%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ALB
-1.10%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US10Y...
+0.53%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BKNG
-0.90%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Geoffrey Smith

Investing.com -- The U.S. Federal Reserve is expected to raise its key interest rate by another 75 basis points in its efforts to bring down inflation, amid hopes that Fed Chair Jerome Powell will signal a slower pace of monetary policy tightening at future meetings. ADP releases its estimate of private sector hiring in October, a day after a mixed report on Job Openings from the Labor Department. Europe's PMIs continue to fall further into contractionary territory as the world's biggest shipping line warns that the pandemic party is finally over. And Zhengzhou, home to the world's largest iPhone assembly line, is locking down for a week, pouring cold water on a rumored relaxation of China's Zero-COVID strategy. Here's what you need to know in financial markets on Wednesday, 2nd November.

1. Fed decision day. Will the first signs of a pivot come?

The Federal Reserve is set to raise the target range for fed funds by another 75 basis points to 3.25-4.00% when its two-day meeting concludes at 14:00 ET (18:00 GMT).

That much is almost taken for granted, given Fed officials' recent guidance and a raft of data showing inflation dynamics that are still too strong for comfort. However, recent signs of a slowdown, especially in interest-rate-sensitive sectors of the economy such as real estate, have encouraged hopes that Fed Chair Jerome Powell will be able to talk about slowing the pace of tightening at his regular press conference.

Treasury yields backed up on Tuesday after falling sharply in anticipation of the beginning of a 'pivot'. That rally in bonds created the risk that Powell – who has been consistently hawkish over recent months – may again disappoint such hopes. By 06:30, the benchmark 10-Year Treasury note traded at 4.06%, down from a high of 4.34% two weeks ago.

2. ADP October payrolls, Challenger job cuts survey to cast more light on labor market

Before the Fed decides, the market will get a sneak preview of labor market trends in October, two days before the government's payroll data are published. ADP's survey of private sector hiring is expected to show a slight slowdown last month, with consensus forecasts for a gain of 195,000, down from 208,000 in August.

Tuesday's Job Openings and Labor Turnover survey from the Labor Department had shown a small but, nonetheless, clear decline in quits continuing, suggesting that good new jobs are getting harder to find and that the willingness to give up a bird in the hand is weakening as the economy slows.

The Challenger job cuts survey is also due for release at 07:30 ET, while the weekly data from the Mortgage Bankers Association will show whether mortgage rates held above 7% after breaching that level for the first time in 20 years last week.

3. Stocks set to open flat as market waits for Fed; insurers in focus after PRU hit

U.S. stock markets are set to open flat, with the tech-heavy Nasdaq 100 reversing its underperformance of Tuesday after better-than-expected quarterly numbers from Uber (NYSE:UBER) on Tuesday.

By 06:15 ET, Dow Jones futures were effectively unchanged, while S&P 500 futures were up less than 0.1%, and Nasdaq 100 futures were up 0.3%, after falling 0.9% on Tuesday.

Stocks likely to be in focus later include Advanced Micro Devices (NASDAQ:AMD), which fell in after hours trade on Tuesday after predicting revenue below consensus forecasts in the fourth quarter due to a pronounced slowdown in PC sales and other gadgets. Prudential Financial (NYSE:PRU) is also set to open under pressure after taking a hit from rising interest rates. Rivals MetLife (NYSE:MET) and Allstate (NYSE:ALL) announce their earnings after the bell Wednesday.

CVS (NYSE:CVS), Humana (NYSE:HUM), and KFC owner Yum! Brands (NYSE:YUM) head the list of early reporters, while Qualcomm (NASDAQ:QCOM), Booking (NASDAQ:BKNG), and lithium miner Albemarle (NYSE:ALB) head the late list.

4. The party's over (for shipping anyway)

The party for the global shipping industry is formally over. Danish shipping giant A.P. Møller – Mærsk (CSE:MAERSKb) warned overnight that global container demand will fall by as much as 4% this year, as the pandemic boom fades and world supply chains iron out their remaining wrinkles. Maersk had earlier forecast volumes would stay at 2021's levels.

The slowdown in world trade is just one of the reasons that Europe's export-heavy economy continues to languish. Final purchasing managers indices from around the region showed sharp drops in new orders to Germany's manufacturing sector in October (although the German labor market remains as much in need of workers as ever after a minimal 8,000 rise in seasonally adjusted jobless rate).

The French, Spanish and Italian manufacturing PMIs joined their German counterpart in falling more deeply into contraction territory.

5. Oil slips as Zhengzhou lockdown provides Zero-COVID reality check

Crude oil prices fell back as another day passed without any sort of confirmation of the rumor that China may soon relax its Zero-COVID policy.

By 06:30 ET, U.S. crude futures were down 0.5% at $87.89 a barrel, while Brent futures were down 0.5% at $94.11 a barrel. Actual news flow regarding Chinese demand has, if anything, gone in the other direction: earlier on Wednesday, city authorities locked down the Zhengzhou Airport Economy Zone - home to the world's biggest iPhone assembly plant – for a week due to a COVID outbreak.

Elsewhere in commodities, wheat prices reversed their Monday gains after Russia rejoined the UN-sponsored deal on guaranteeing safe passage for exports.

Fed Decision, ADP, Zhengzhou Lockdown - What's Moving Markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (20)
Robert Cox
Robert Cox Nov 02, 2022 12:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why do these articles always argue that the Fed might pivot due to the bursting of the real estate bubble?
theodorus Jason
theodorus Jason Nov 02, 2022 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
o try
theodorus Jason
theodorus Jason Nov 02, 2022 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
theodorus Jason
theodorus Jason Nov 02, 2022 12:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Marcus Antonius
Marcus Antonius Nov 02, 2022 10:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Guys, it’s not the Fed’s job to please financial markets … anymore. They have bigger fish to fry for a long time to come.
marcos buzaglo
marcos buzaglo Nov 02, 2022 9:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hello
Casador Del Oso
Casador Del Oso Nov 02, 2022 9:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Blow out your candles and make a wish...Fed pivot.
Kerry Ditto
Kerry Ditto Nov 02, 2022 9:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
even russia changes direction to resume participating in grain deal. fed shall pivot. massive market rally is likely
kailash paliwal
kailash paliwal Nov 02, 2022 8:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I hope today will be U turn in Market. Santa on the way so chill bro.
Kerry Ditto
Kerry Ditto Nov 02, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Powell would probably say something implying time to pivot
Jedrek Zak
Jedrek Zak Nov 02, 2022 8:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
why? literally nothing in the data has suggested to do so.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email