Reads
- Howard Schultz to testify about labor practices at Starbucks (SBUX) WSJ
- Baidu to test AI chat feature next week (BIDU) DigiTimes
- Disney halts production of two Star Wars titles (DIS) Variety
- Silvergate looking to avoid shutdown (SI) Bloomberg
Todays Open Interest Change
PREMIUM
PREPPER
Investors await Federal Reserve Chair Jerome Powell's semi-annual testimony on monetary policy before the Senate Banking Committee later in the day for clues on the central bank's future rate path amid a wave of strong economic data. Powell will deliver the same testimony before the House Financial Services Committee on Wednesday.
Backdrop: The Fed chief's appearances at Capitol Hill follow the release of the central bank's monetary policy report. While the Fed eased its aggressive rate-hiking campaign, recent data could mean a return to bigger rate hikes to rein in stubbornly high inflation. Markets are largely expecting a 25-bp rate hike at the Fed's March 21-22 meeting, according to the CME FedWatch Tool, and have priced in the probability for 'higher for longer' interest rates. Meanwhile, San Francisco Fed President Mary Daly said disinflation is far from certain and the Fed is not done with tightening.
Outlook: "All eyes will be on whether Powell uses the opportunity to strike a more hawkish tone," said Deutsche Bank's Jim Reid. "The question of most interest will be whether he indicates a preference to stick to the 25-bp pace going forward, or if 50-bp moves are still on the table." Wells Fargo expects the Fed to finish raising rates by mid-2023, "once disinflation and a more rapidly slowing economy are more evident." (4 comments)
Meta Platforms (META) is set to cut thousands more jobs as soon as this week, despite CEO Mark Zuckerberg's holiday-season assurance that he wasn't expecting more layoffs. The latest round of job cuts follows the social media giant's move last year to lay off around 11,000 workers - about 13% of its workforce. The new job cuts are tied to financial targets, and are separate from Meta's plans to flatten its company structure to create less distance between Zuckerberg and interns. The change in structure is expected to result in thousands of job cuts, and some by attrition. (31 comments)
Regulators are reportedly looking to block the prospective merger between JetBlue Airways (JBLU) and Spirit Airlines (SAVE), sending shares of the latter sliding nearly 9% on Monday. Both the Department of Transportation and Department of Justice are looking to halt the deal on the grounds that the merger would be anticompetitive. Executives from both carriers met with the DOJ late last month in a "last-rites" meeting to assuage concerns over the merger, but it appears these efforts have failed. (34 comments)
California 'done' with Walgreens
Shares of Walgreens Boots Alliance (WBA) dropped after California Governor Gavin Newsom slammed the pharmacy chain operator over its plans to stop selling abortion pills in 20 states. Newsom said the state won't do business with any company that "puts women's lives at risk". He directed the California Department of Health and Human Services to review all relationships with Walgreens, including Medi-Cal and Covered California, the state’s two largest public insurance plans. (246 comments)
Today's Markets
In Asia, Japan +0.3%. Hong Kong -0.3%. China -1.1%. India +0.7%.
In Europe, at midday, London +0.3%. Paris +0.2%. Frankfurt +0.2%.
Futures at 6:30, Dow flat. S&P +0.1%. Nasdaq +0.2%. Crude -0.7% to $79.90. Gold -0.4% at $1846.90. Bitcoin -0.1% to $22,371.
Ten-year Treasury Yield -5 bps to 3.93%
Today's Economic Calendar
10:00 Jerome Powell Speech
10:00 Wholesale Inventories (Preliminary)
1:00 PM Results of $40B, 3-Year Note Auction
3:00 PM Consumer Credit
What else is happening...
WSB survey results: SA users flag information technology as big 2023 winner.
Google (GOOG) (GOOGL) to trim senior promotions this year amid growth slowdown.
Atlassian (TEAM) to lay off around 5% of its workforce amid rebalancing of resources.
Meta's (META) WhatsApp agrees to be more compliant with EU privacy rules.
Snap (SNAP) jumped 11% to a month-high as likelihood of TikTok ban gains steam.
Exxon Mobil (XOM) sued by federal agency over hangman's nooses found at Louisiana plant.
Cheniere (LNG) CEO calls lack of U.S. investment in natural gas pipelines 'scary'.
Reserve Bank of Australia lifts key interest rate by 25 bps in record tenth consecutive hike.
U.S. solar panel imports from China on the rise, says top White House advisor.
Pfizer (PFE) is only bidder for cancer-focused Seagen (SGEN), talks 'still very preliminary'.