Get 40% Off
🤯 Perficient is up a mind-blowing 53%. Our ProPicks AI saw the buying opportunity in March.Read full update

Fed speak ahead, Disney to report - what's moving markets

Published 11/08/2023, 05:05 AM
© Reuters

Investing.com -- U.S. futures hovered around the flatline on Wednesday, with comments from Federal Reserve officials tempering some investor optimism that has supported a prolonged rally on Wall Street. Markets will be closely listening to statements from Fed Chair Jerome Powell later today, as traders attempt to gauge the central bank's future rate path. Elsewhere, Walt Disney (NYSE:DIS) is due to report its latest quarterly earnings and Democrats secure key victories in off-year elections.

1. Futures hover around flatline

U.S. stock futures held close to the flatline on Wednesday, as investors examined the staying power of a rally on Wall Street that extended into the prior session.

By 05:01 ET (10:01 GMT), the Dow futures contract was mostly flat, S&P 500 futures had slipped by 2 points or 0.1%, and Nasdaq 100 futures had shed 12 points or 0.1%.

The benchmark S&P 500 and tech-heavy Nasdaq Composite notched their seventh and eighth straight day of gains on Tuesday, respectively, in the longest winning streak for both indices since 2021. The 30-stock Dow Jones Industrial Average also posted its seventh consecutive positive day.

Traders have been buoyed by hopes that the Federal Reserve may react to recent economic data by soon beginning to cut interest rates from more than two-decade highs. However, some Fed officials have flagged that stronger-than-anticipated third-quarter U.S. growth could warrant further tightening, with one policymaker even calling for another hike (more below).

2. Powell comments in focus

Fed Chair Jerome Powell is set to deliver comments at separate conferences in Washington D.C. over the next two days, with markets likely keen for him to expand on his assessment of the Fed's upcoming rate decisions.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Speaking after the Fed held interest rates steady last week, Powell stressed that the U.S. central bank will keep borrowing costs at "sufficiently restrictive" levels in a bid to bring inflation down to its 2% target.

He added that he was not confident yet that the Fed had achieved such a stance, although he noted that officials will proceed "carefully" ahead of future rate alterations.

This week, Fed Governor Christopher Waller suggested that a "blowout" U.S. gross domestic product (GDP) reading of 4.9% at an annualized basis in the third-quarter may factor heavily into how the central bank approaches its next policy moves.

Fellow Fed Governor Michelle Bowman also took note of the GDP figure, saying it could be evidence of an accelerating U.S. economy. She reiterated her support for an additional rate increase, particularly if a recent cooling in price pressures shows signs of stalling.

3. Disney earnings ahead

Walt Disney is due to report its latest quarterly results after the bell on Wednesday.

Chief Executive Officer Bob Iger may face questions over his strategy to revitalize the structure of the entertainment giant, which has been hit by weakness at its traditional television offerings and lackluster growth at its streaming services. Shares in Disney have slipped by over 15% in the last one-year period.

Iger has previously floated the idea of possibly offloading some of Disney's non-core assets, including its ABC television property. Disney has also announced an acquisition of TV giant Comcast's (NASDAQ:CMCSA) one third stake in Hulu, a move that will give the company full ownership of the streaming group.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Attention could also center around Iger's push to maximize profitability at Disney's lucrative international theme parks and cruises division through investments in new attractions and higher prices for some tickets. Despite softer domestic traffic this summer, Iger has called the parks and experiences unit a "key growth engine" that has helped offset weakness in other parts of the business.

4. Democrats secure off-year electoral wins

Governor Andy Beshear has secured re-election in Kentucky, highlighting a day of victories for a Democratic party grappling with sagging polling numbers for President Joe Biden.

Beshear, a Democrat, won a second term in a typically deeply conservative state that voted heavily in favor of former Republican president Donald Trump in the 2020 presidential election.

Elsewhere, voters in Ohio backed a measure to enshrine abortion rights -- a major focus of Democratic messaging -- in the state's constitution.

The debate over reproductive rights also helped Democrats in Virginia, where the party gained full control over the state's legislature, according to a Wall Street Journal tally called by the Associated Press.

The results come as polls show Biden trailing Trump in five of six swing states that could determine the outcome of the 2024 presidential vote. Biden dismissed the polls following this week's elections, although reports suggest that Democrats have been privately concerned over his chances next year.

5. Crude dips after U.S. inventories surge

Oil prices were lower on Wednesday, after a surprise expansion in U.S. crude inventories raised concerns about slowing demand at the world’s largest consumer.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Data from the American Petroleum Institute, an industry body, showed that U.S. crude inventories surged by almost 12 million barrels last week, much more than expectations for a draw of 300,000 barrels.

The official weekly data from the U.S. Energy Information Administration has been delayed until the week of Nov. 13.

At 05:02 ET, the U.S. crude futures traded 0.3% lower at $77.15 a barrel, while the Brent contract dropped by 0.2% to $81.49 per barrel. 

Latest comments

Poor Jerome he looks sick.
poor him stealing everyone's money and transferring to the rich. hope he gets the worst cancer soon
matt that's a lot of hate.. how did powell steal everyone's money? you must be talking about trump, who oversaw the transfer of 1 trillion dollars from American working families, to billionaires like himself...
They create inflation at a table with the excuse of pandemics, attacks and wars, then they tell you that they fight inflation at a table by increasing rates to make the banks richer by making the markets collapse (the savers' money) which the banks still pocket ....Powell has to make the markets fall, that's why they make him talk....let's see if he succeeds....
who is "they"?
You know. THEY!
You mean the FED speech where he reiterates higher for longer even though the current investor rethoric is imminent pivot.
I SEE GREEN!!
The pre-market FRAUD unfolds in living color, as the most criminally manufactured "rally" in 2 years is predetermined to continue.  BIGGEST INVESTMENT JOKE IN THE WORLD.
then go long
Wall Street has to get those year end bonuses... January calls 🤑
ForElectionDonation, Powell is possible to tell inflation is manageable now although nothing changed or even worse caused by more money leaking by government. Then it is party time and super long?
Powell is not elected. You don't know what you are talking about.
Powell is appointed by Orange Trump, btw.
There's only one thing Powell can say. December will bring a rate hike. According to the Cleveland Nowcast, YOY CORE PCI for October is 4.16%, and so far, YOY CORE PCI for November is 4.20%. Sorry, but Powell is losing the inflation game.
Powell always repeat himself: It‘s data- dependent…
Another thing he is consistent on… giving no indication rates will be cut. Market mindset is yet again salivating for no reason.
Absolutely right, Ross. FOMO. No one wants to miss the minster rally. Unfortunately, that train won't be pulling into the station for at least a couple years. However, long range data shows the S&P tanking the summer of 2025. No telling how long.
They don't know whats happening next week much less 2025. We've been waiting on this recession for 2 years now
?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.