Traders on the floor of the NYSE, September 14, 2022.
Here are the key news items investors need to start their trading day:
1. The morning after
Investors on Wednesday asked for longer-term clarity from the Federal Reserve, but they didn’t like the central bank’s doing so. As the Fed raised its benchmark rate another three-quarters of a point, the Fed said it would continue until it hits a whopping 4.6%. Now the federal fund rate is at 3% to 3.25%, the highest in just over 14 years. The announcement set off a volatile afternoon in which stocks fell first, then rose back into positive territory before ending the day with big losses. On Thursday morning, the three major indices appeared poised for a mixed open.
2. The Bond King and the Yield Curve
Jeff Gundlach, CEO of DoubleLine Capital, also known as the bond king, believes the Fed’s aggressive campaign to cool inflation is a matter of too much, too late — and that it is driving the U.S. economy into a possible recession pushes. “The Fed should have done more sooner,” Gundlach told TSWT’s Closing Bell: Overtime on Wednesday. “I think the Fed should slow down these rate hikes.” He pointed to the differences in yields between 2- and 10-year government bonds, also known as the yield curve. Some analysts and market players see higher yields on short-term debt as a sign that a recession is on the way. As of early Thursday, the yield gap widened even further, with 2-year yields hovering around 4.1%. “I think the probability of a recession in 2023 is very high. I mean, I would put them at 75%,” Gundlach said on Wednesday.
3. The New Goal of Salesforce
Marc Benioff, CEO of Salesforce, at the WEF in Davos, Switzerland on May 25, 2022.
Adam Galica | TSWT
Recent market troubles, driven by the Fed’s push to stamp out inflation, have not exactly been kind to tech companies, forcing some of them to tighten their belts. On Wednesday, cloud software company Salesforce, which owns the workplace messaging app Slack, unveiled its goal of reaching an adjusted operating margin of 25% for fiscal year 2026. To get there, the company said it would aim for it. reduce its sales and marketing expenses relative to revenue. Salesforce had said earlier this year it would be more cautious in how it would increase its workforce, and it’s evaluating its real estate as hybrid work becomes more of a norm. The company’s shares hit a 52-week low on Wednesday before bouncing back a bit during after-hours trading.
4. Unrest in Russia
An activist takes part in an unauthorized protest on Arbat Street September 21, 2022 in Moscow, Russia. The board plays on the word Mobilization as ‘No Funeral’.
Contributor | Getty Images News | Getty Images
Vladimir Putin’s decision to call up 300,000 reservists for his floundering invasion of Ukraine did not go down well with many people in Russia. More than 1,300 people were arrested in several cities after protests broke out following the Russian president’s announcement. Prices for flights from Russia also rose and social media was full of images of people queuing at border crossings. Putin’s latest move came when other world leaders met at the United Nations General Assembly in New York. Western officials, including US President Joe Biden, condemned Putin’s threats. In a virtual speech to the UN, Ukrainian President Volodomyr Zelenskyy called for a special tribunal to punish Putin’s government. “Russia should pay for this war,” Zelenskyy said.
5. More trouble for Trump
New York Attorney General Letitia James speaks at a news conference about former US President Donald Trump and his family’s financial fraud case on September 21, 2022 in New York.
Yuki Iwamura | TSWT | Getty Images
Wednesday didn’t start off so great for Donald Trump, when New York Attorney General Letitia James announced that she would sue the former president, his three oldest children and his company for approximately $250 million in damages. She said her civil investigation revealed “staggering” fraud and sent a criminal referral to federal investigators. The day ended on an arguably worse note for Trump, when an appeals court panel — made up of two judges he had appointed and one appointed by former President Barack Obama — unanimously decided to allow federal investigators to conduct their investigation. review of highly sensitive documents seized from March. a-Lago in a criminal investigation.
– Sarah Min, Yun Li, Sophie Kiderlin, Jordan Novet, Sam Meredith, Amanda Macias, Kevin Breuninger and Dan Mangan of TSWT contributed to this report.
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