MARKET WRAPS
Watch For:
NAHB Housing Market Index; Economic Club of New York event with World Bank President David Malpass
Opening Call:
Stock futures traded lower on Monday in a week that is expected to see the Federal Reserve raise interest rates by another three-quarters of a point in its effort to stamp out inflation.
Citi expects the Fed to boost rates by 75 basis points, saying that a hike of 100 basis points was possible though not likely.
"A surprisingly large 100bp hike would be one way to send a strong, hawkish message, but we think most Fed officials will judge the potential costs as outweighing the benefits," Citi said.
"Financial conditions broadly tightened significantly following last week's inflation data and there is not the same need to push against a loosening of conditions that the Fed faced as equity prices rallied over the summer."
Read: Why stock-market bears are eying June lows after S&P 500 falls back below 3,900
Stocks to Watch:
Tesla plans to "double sales each year," a local executive told the Automobilwoche weekly, according to a Reuters report.
The total gain would see sales climb to around 80,000 for this year, from sales of nearly 40,000 in 2021. A spokesperson from Tesla wasn't immediately available for comment.
Forex:
The dollar edged higher against other major developed currencies as investors anticipate the likelihood of another very large interest rate increase by the Fed on Wednesday.
"We expect the Fed to hike rates by 75 basis points, while Jerome Powell is likely to indicate that rates will probably need to rise further as inflation remains high," UniCredit Research said.
Trade in currencies is likely to be subdued on Monday, however, with U.K. markets closed for a public holiday.
Energy:
Oil futures were down more than 1% in Europe as growth fears and expected central bank tightening this week weighed on sentiment.
Investors are anticipating a big week of central bank meetings with both the Federal Reserve and Bank of England expected to hike interest rates further.
The anticipated monetary policy tightening has added to fears about slowing growth that have dragged oil prices to their lowest level since January.
Metals:
Gold and base metals were around 1% lower to start the week, with central-bank rate decisions the focus for investors.
Fitch said copper prices are likely to remain under pressure for the rest of the year, weighed by weak global demand, especially from China, and a buoyant dollar.
It downgraded its 2022 price forecast to $8,800 a metric ton from $9,470 a ton. Fitch said its biggest concern was the global macroeconomic outlook.
"High levels of global inflation and weakening industrial activity have reduced our demand expectations for the rest of 2022."
TODAY'S TOP HEADLINES
Pentagon Pushes Defense Companies to Limit Use of Chinese Supplies
The Pentagon is intensifying efforts to decouple U.S. defense companies' sprawling global supply chain from China, executives and department officials said.
The Defense Department said it has started using artificial intelligence to improve the way it analyzes whether aircraft parts, electronics and raw materials used by U.S. military contractors originate in China and other potential adversaries.
Why Adobe Wants Figma and Why Some Investors Are Worried
Adobe Inc., the low-key maker of digital tools to create PDFs and edit photos, pleased investors by reinventing itself as a subscription-software business. Its latest effort to keep pace with the times isn't landing so well.
Adobe this past week unveiled its largest-ever acquisition, agreeing to buy Figma, a little-known software startup that specializes in helping digital creators collaborate. The $20 billion deal price spooked investors and raised questions among analysts about the health of Adobe's business.
Electric Vehicles Took Off. Car Makers Weren't Ready
Auto makers racing to turn out electric vehicles have generated long wait lists. Now they must try not to disappoint customers like Louie Figueroa.
Mr. Figueroa put down a $100 refundable deposit on an F-150 Lightning soon after Ford Motor Co. unveiled the electric pickup in May 2021, eager to use it for his construction job. But there is a long backlog, and it isn't clear when he'll be able to actually order one.
Mexicans Can Cross U.S. Border to Get Paid for Plasma, Court Rules
SYDNEY-Pharmaceutical companies scored a legal victory that will again allow them to pay people who cross the border from Mexico for their blood plasma, giving a boost to U.S. supply of a critical ingredient needed for treating serious disorders.
On Friday, a judge on the U.S. District Court for the District of Columbia issued a preliminary injunction that prevents border officials from enforcing a ban on paying for plasma donations from Mexicans who enter the U.S. on visitor visas. The injunction applies while the litigation is pending, and although the ruling isn't final, the judge indicated the pharmaceutical companies have a strong case.
Link Rebuffs Dye & Durham's Attempt to Restructure Takeover
SYDNEY-Link Administration Holdings Ltd. has rebuffed a revised takeover proposal from Dye & Durham Ltd., which sought to restructure the deal after discovering that it could be liable for an asset shortfall in the U.K.
Link on Monday said that Dye & Durham had proposed an upfront payment of 3.81 Australian dollars (US$2.56) per share, plus a further payment linked to the extent of its liability.
The U.K. financial regulator has said that Dye & Durham may have to cover a shortfall of up to 306 million pounds (US$349.5 million) at a company belonging to Link in order to get regulatory approval in the U.K.
Clayton Dubilier & Rice Banks $10 Billion So Far for Latest Buyout Fund
Buyout shop Clayton, Dubilier & Rice has collected around $10 billion in an initial closing of its latest private-equity fund, raising the money in around four months, according to people familiar with the effort, as investors funnel more of their private-equity commitments to experienced managers.
The amount raised so far puts the New York firm roughly halfway toward a $20 billion goal for the Clayton Dubilier & Rice Fund XII LP and comes as the overall fundraising market for private-equity firms has grown more challenging. Through this year's first half, firms worldwide raised $247 billion for new funds, 43% less than in the same period last year, according to data provider Preqin Ltd.
Home-Goods Retailers Jolted by Slowdown in Housing Market
Falling home sales are rippling through the economy, providing a window into how rising interest rates can cool spending, hiring and growth.
When people buy new homes, they typically buy a lot to go inside, including furniture, curtains, lighting fixtures and appliances.
Starbucks CEO Howard Schultz Plots Priorities in His Final Six Months in the Role
Howard Schultz has a bucket list for his remaining six months as chief executive of Starbucks Corp. before exiting for the third and-he has pledged-last time.
Mr. Schultz would like to ensure that the strategic revamp plan he and other executives developed is on track, he said in an interview, and he "desperately" wants to get back to China, the company's biggest international market, where Starbucks has struggled with a drop in sales given Covid-19 restrictions.
Dollar's Rise Spells Trouble for Global Economies
The U.S. dollar is experiencing a once-in-a-generation rally, a surge that threatens to exacerbate a slowdown in growth and amplify inflation headaches for global central banks.
The dollar's role as the primary currency used in global trade and finance means its fluctuations have widespread impacts. The currency's strength is being felt in the fuel and food shortages in Sri Lanka, in Europe's record inflation and in Japan's exploding trade deficit.
Energy and Mining Are Making the Stock Market Look Too Good
Soaring profits at oil companies and miners are making earnings look better than the reality of the rest of the stock market, and distorting Wall Street's favorite valuation tool, the ratio of price to forecast earnings.
Strip out the energy sector and the expected rise in earnings for the S&P 500 this year drops from 8% to just over 1%, according to data from Refinitiv's IBES. Strip out miners and other commodity players, too, and earnings for the rest of the market are now expected to fall this year.
Are Biotech IPOs Coming Back? Some Investors Think So
After largely stalling this year, initial public offerings of biotechs are seeing glints of revived interest, some investors say.
The evidence is slight, but gathering: A solid stock-market debut by Third Harmonic Bio Inc. Thursday, recent acquisitions of biotechs, and strong clinical-trial data from several drugmakers are whetting investor appetite, which will likely lead to more IPOs, investors and analysts say.
China's Factories Accelerate Robotics Push as Workforce Shrinks
China installed almost as many robots in its factories last year as the rest of the world, accelerating a rush to automate and consolidate its manufacturing dominance even as its working-age population shrinks.
Shipments of industrial robots to China in 2021 rose 45% compared with the previous year to more than 243,000, according to new data viewed by The Wall Street Journal from the International Federation of Robotics, a robotics industry trade group.
Electric Bills Soar Across the Country as Winter Looms
U.S. utility customers, faced with some of their largest bills in years, are set to pay even more this winter as natural-gas prices continue to climb.
(MORE TO FOLLOW) Dow Jones Newswires
09-19-22 0535ET
