Five things you need to know about Wednesday, July 6:
Stock Futures Stay Strong, But the Yield Curve Inverts As Recession Fears Linger
In pre-market trading, US equity futures fell, but global markets remained stable, and the dollar maintained its position at its highest level in decades, as investors monitor developments in the bond market that suggest a near-term recession in the world's largest economy.
This week, safe-haven trading has lifted the US dollar index, which compared the greenback to a basket of its global counterparts, to its highest level in 20 decades as factory activity and output statistics from major economies around the world slow, and inflation pressures continue to drive input costs and squeeze margins.
After a so-called 'inversion' during yesterday's Wall Street session, benchmark 2-year Treasury note rates traded north of 10-year note rates for the majority of the overnight session.
Benchmark 10-year notes were last seen trading at 2.881 percent, while 2-year notes were last seen at 2.838%.
As traders sell short-term notes in anticipation of rate rises, but buy longer-dated papers in anticipation of an economic slowdown, investors usually associate a sustained inversion with a near-term downturn.
The Atlanta Fed's GDPNow growth prediction tool shows that the economy is shrinking at a 2.2 percent pace as it enters the third quarter, following what are likely to be two consecutive quarters of decline between January and June.
The Federal Reserve has put a lot of emphasis on its commitment to raising interest rates in order to subdue consumer price pressures for the first time in forty years. However, some investors are concerned that the Fed will slowed the rate of signaled rate rises if the country falls into recession.
Minutes from the Fed's June meeting, scheduled for later today, might provide at least some clues as to this possibility, and may explain why markets have remained stable overnight trading.
In early Frankfurt trading, the Stoxx 600 climbed 1.21% following a modest 0.98% decline for the Asia-region MSCI ex-Japan index and a 1.22% decline for the Nikkei 225 in Tokyo.
Futures linked to the S&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;
2. -- Fed Minutes In Focus As Growth Bets Quickly Fade
Later today, the Federal Reserve will release minutes from its June policy meeting, revealing further information on the motivation for the central bank's biggest single-day rate rise in three decades, and its prediction of further increases in the coming months.
On June 15, the Fed raised its base lending rate by 75 basis points, the highest level since 1994, to a range of 1.5% to 1.75%, and said further near-term rate adjustments would be required in order to combat the faster rate since the early 1980s.
The Federal Reserve has increased its unemployment prediction for the United States, reducing its 2022 GDP growth prediction to 1.7 percent from a previous estimate of 3.5%.
Jerome Powell, the Fed chair who advised investors to a rate hike of only 50 basis points, said at the time that rate rises of that magnitude would not be "common," but current market betting predicts an 88% probability of a similar increase when the Fed meets later this month in Washington.
Given the pace of inflation at the time, what is crucial for investors today is whether Fed Governors had any desire for a 100 basis point increase, and whether any voting members indicated that slowing growth, or even easing inflation pressures, would allow for rate hikes to resume in the fall.
Microsoft Demonstrates Its Potentiary Force Against Russia
More than just gas prices, Americans are being harmed.
The AAP Team at The Street.com has mixed opinions on Ford.
Later today, the minutes will be published at 2:00 pm Eastern time.
Oil Prices are rising, and OPEC Secretary General Barkindo, who died at the age of 63, is lowering.
As commodity markets continue to reflect recession worries, global oil prices rose for the first time in four months.
Mohammad Barkindo, the OPEC's secretary general, died just hours after giving a speech in Abuja.
Many believe that Barkindo, who served as Nigeria's energy minister before taking on the top position at OPEC in 2006 and again in 2016, has helped shape the cartel from a loose collective of divergent interests into a more organized group of oil producing nations that, together with Russia, has dictated the pace of output for the majority of the last six years.
"To serve as OPEC Secretary General for two terms has been an honor of a lifetime," Barkindo said Wednesday. "Over the past six years, we have witnessed both challenging and historic moments, which have underscored time and again the importance of cooperation and teamwork."
The role of OPEC in delivering more oil to global markets, at a time of rising prices but uncertain demand, will be critical to President Joe Biden's drive to lower domestic energy prices and reduce inflation.
WTI crude futures for August delivery, the most tightly-linked commodity to U.S gasoline prices, were marked 54 cents higher on the session at $100.04 per barrel, while B (rent crude contracts for September delivery, the global pricing benchmark, rose $1.35 to change hands at $104.17 per barrel) - Get Amazon.com Inc. Report
The national average for U.S. gas prices decreased by another two cents overnight to $4.779 per gallon, the lowest level in over a month, according to data from the AAA motor club.
Amazon Purchases A Small Share In Grubhub
Just East Takeaway (TKAYF)'s stock rose in Amsterdam trading Wednesday after the struggling meal delivery company said Amazon (AMZN) - Get Amazon.com Inc. Reporthad taken a 2% share in its U.S. division known as Grubhub.
Just Eat, which purchased Grubhub last year in an all-share deal worth $5.8 billion, will sell another 13% share to Amazon if their new promotion, which includes free delivery for orders over $12 in the 4,000 cities that Grubhub operates, attracts enough customers.
"I'm incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing goal to connect more diners with local eateries," said Grubhub CEO Adam DeWitt. "We're confident that this offering will expose many new diners to the value of Grubhub+ while generating more business to our restaurant partners and drivers."
In Amsterdam, Just Eat Takeaway shares were valued at 16.22% higher, while Amazon shares were 0.44% lower in pre-market trading, indicating a $113.00 opening bell price.
Boris Johnson is facing a fresh political crisis as senior ministers resign.
Prime Minister Boris Johnson of the United Kingdom was left hanging by a thread on Wednesday as a fresh political scandal threatens to put his controversial tenure to the end, and might spark fresh elections in Europe's second-largest economy.
Johnson resigned from two key cabinet members last night, including his second in command, finance minister Rishi Sunak, amid a growing debate over the appointment of his close friend Christopher Pincher to the Chief Party Whip.
Pincher was forced to resign last week amid allegations of molesting two men in a central London nightclub. Allegations of a similar nature were made known to the Prime Minister prior to his appointment.
The scandal is just the latest in a series of controversies that have roiled Johnson's leadership following his landslide election victory in 2019, which culminated last month in a narrow but brutal victory by his parliamentary colleagues in a vote of "no confidence."
Several other senior government ministers resigned on Wednesday, leaving the Prime Minister fighting for his political future.