5 things to know before the stock market opens on Wednesday

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U.S. Federal Reserve Board Chairman Jerome Powell holds a news conference after the Federal Reserve raised its target interest rate by three-quarters of a percentage point in Washington, September 21, 2022.

Kevin Lamarque | Reuters

Here are the most important information investors need to start their trading day:

1. It’s Fed Day

The Federal Reserve is expected to wrap up its two-day meeting on Wednesday afternoon with another three-quarter point rate hike. Investors will be locked in to hear what the Fed and Chairman Jerome Powell have to say about their next course of action with the job market and economy still booming. “We think they are opening the door to a reduction in rate hikes from December,” said Michael Gapen, chief US economist at Bank of America. Other market watchers, however, expect Powell to avoid trying to build too much excitement for a slowdown in rate hikes. Read live market updates here.

2. The Amazon Crisis

An Amazon Prime truck is pictured as it crosses the George Washington Bridge on Interstate Route 95 during Amazon’s two-day “Prime Early Access Sale” shopping event for Amazon members in New York, on October 11, 2022.

Mike Segar | Reuters

almost all AmazonThe gains of the pandemic have disappeared. The e-commerce and cloud computing giant suffered its fifth consecutive day of market losses on Tuesday, falling to its lowest level since April 2020. It also fell below $1 trillion in market value. The stock is down nearly 42% so far this year as the tech titan tries to come to terms with the fact that consumers aren’t spending as much money on things as they did at the start of the pandemic. Instead, people are fighting inflation by focusing more on the essentials, like groceries, while shedding more than two years of Covid restrictions on eating out, partying and traveling more. . These days, the rush of seeing an Amazon package left on your doorstep just isn’t as exciting as a European jaunt or burgers and beer with your friends.

3. “Dark clouds” for trading

Shipping company Maersk raised its 2022 profit forecast after beating quarterly revenue expectations.

Photo by JOHN THYS/AFP via Getty Images

Shipping giant Maersk on Wednesday warned of bleak times ahead for global trade, even as it reported record profit stemming from high tariffs charged by its shipping business. “With war in Ukraine, an energy crisis in Europe, high inflation and a looming global recession, many dark clouds are looming on the horizon,” Søren Skou, CEO of the Danish company, said in a statement. . He said all of this weighs on consumers’ ability to spend, leading to lower demand for shipping services. In turn, the company believes it saw a spike in revenue from its ocean business and that things are slowing down in the fourth quarter.

4. Russia says grain deal is back

Russian President Vladimir Putin speaks during his news conference at the Rus Sanatorium, October 31, 2022, in Sochi, Russia. The leaders of Russia, Armenia and Azerbaijan gathered in the Russian resort town of Sochi for a tripartite meeting.

Contributor | Getty Images

Russia said on Wednesday it agreed to join a deal with Ukraine that would keep grain exports flowing. The Kremlin suspended its involvement in the deal over the weekend, citing attacks on its ships in the Black Sea. The break triggered a spike in grain prices. Ukraine, in turn, dismissed this claim as a false pretense. However, on Wednesday Russia said it had obtained guarantees from Ukraine that it would not carry out military operations against Russian forces using the Black Sea corridor. Read live war updates here.

5. Demand for mortgages remains weak

An ‘open house’ flag is displayed outside a single family home on September 22, 2022 in Los Angeles, California.

Dinner Allison | Getty Images

A slight drop in rates last week did not spur many new mortgage applications. Indeed, aggregate demand fell as buyers stayed largely on the sidelines with rates hovering above 7% and prices remaining high despite a recent sudden cooling. According to the Mortgage Bankers Association, demand for refinance mortgages has increased, albeit slightly, but not enough to move things forward. Homebuilders have already declared housing in a recession, and now they are warning tougher times are coming in the new year.

– CNBC’s Patti Domm, Annie Palmer, Elliot Smith, Holly Ellyatt and Diana Olick contributed to this report.

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