Traders on the floor of the NYSE, Sept. 27, 2022.
Source: NYSE
Here are the most important news items that investors need to start their trading day:
1. Looking for a bottom
For a while it looked hopeful U.S. stock markets had fallen as far as they could this year. Since June, stocks had been chugging back. Now we’re in the early days of fall, and the S&P 500 is coming off a fresh 2022 low Tuesday. There could be more selling to come, as well. The Fed is sticking to its aggressive anti-inflation plan, while the upcoming batch of corporate earnings could offer some more dire news, even if companies have lowered expectations. Stock futures seesawed Wednesday morning following a new development from the UK (see below).
2. Bank of England gets involved
Analysts expect the Bank of England may need to raise interest rates more aggressively following market turbulence on Monday morning.
Sopa Images | Lightrocket | Getty Images
The Bank of England is intervening in the market chaos unleashed by the new UK government’s tax-cut-heavy economic plan. The central bank said Wednesday that it would hold off on its plans to start selling bonds, also known as gilts in the UK, and start a temporary program of buying longer-term debt. “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the Bank of England said. “This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.” The pound, which had fallen drastically against the dollar, popped briefly on the news. Yields on gilts are on track to post their biggest monthly gain in 65 years. The tax-cut plan from new Prime Minister Liz Truss’s government puzzled investors, officials and experts alike, even drawing backlash from the International Monetary Fund.
3. Ian rolls in
Hurricane Ian makes its way to Florida’s west coast after passing Cuba in a composite image from the National Oceanic and Atmospheric Administration (NOAA) GOES-East weather satellite September 27, 2022.
NOAA | via Reuters
Ian became a Category 4 hurricane as it geared up to smash into the Tampa region on Florida’s west coast. The storm’s center was about 75 miles west-southwest of Naples, Florida, as of 5 a.m. ET Wednesday, according to the National Hurricane Center. Ian left Cuba without power before heading toward Florida. The storm’s approach prompted several authorities and companies to batten down the hatches. Walt Disney World and Universal Studios Orlando said they would be closing their parks for at least a couple days, while Amazon said it would close some of its warehouses in the region. The Tampa and Orlando airports also suspended operations.
4. Pivotal moment for Ukraine
A view shows the Russian flag flying in the square during a five-day referendum on the secession of Zaporizhzhia region from Ukraine and its joining Russia, in the Russian-controlled city of Melitopol in the Zaporizhzhia region, Ukraine September 26, 2022.
Alexander Ermochenko | Reuters
Referendums in Russian-occupied areas of Ukraine have shown wide support for breaking off and joining Russia. It’s a predictable outcome since the votes were hastily arranged after Ukraine’s lightning offensive to seize back large chunks of its territory – and because they were rigged, according to analysts. It’s a troubling development for Ukraine and Western nations in general, since Russian leader Vladimir Putin and his government have said they will take any measures to defend Russia’s land. “As for the risk of Russia using these votes and subsequent annexation of those territories as a pretext for nuclear strikes — we are conscious of this risk, we understand that it is real,” Yuriy Sak, an advisor to Ukraine’s defense minister, told CNBC. There are also worries that the United States and Europe can’t provide weapons to Ukraine fast enough. NATO held a special meeting Tuesday to discuss the matter. “Unless we have new production, which takes months to ramp up, we’re not going to have the ability to supply the Ukrainians,” one expert told CNBC.
5. GM hits the brakes on return to office
General Motors CEO Mary Barra speaks to reporters while she waits for the arrival of President Joe Biden at media day of the North American International Auto Show in Detroit, Michigan, September 14, 2022.
Rebecca Cook | Reuters
More companies are telling employees to head back to the office after years of remote work. Covid infections are dropping, and treatments and vaccines are more widely available. But when General Motors on Friday told its corporate employees that they would have to return to the office at least three days a week, it didn’t go over well. So, on Tuesday, the company walked it back with another note to employees. After all, it’s hard to undo two and a half years of routine. “Our plan was always, and still is, collaboratively design the solution that best balances the needs of the enterprise with the needs of each of you,” said the memo, which was signed by CEO Mary Barra and other executives.
– CNBC’s Jesse Pound, Elliot Smith, Sarah Whitten, Annie Palmer, Leslie Josephs, Natasha Turak and Michael Wayland contributed to this report.
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