Good morning traders!
The S&P 500 ($SPY) is trading near yesterday’s close. Let’s get into it…
U.S. stock futures saw a minor rise as investors await the minutes from the Federal Reserve’s September meeting, following hints from several Fed officials on a possible pause in further interest rate hikes this year due to a recent increase in U.S. Treasury yields. The forthcoming release of the September meeting minutes, where the Federal Open Market Committee decided to keep borrowing costs steady, is now under the spotlight. This decision reflected a cautious interest rate strategy to manage price growth without sparking a wider economic crisis. Despite a previous rigorous policy tightening that elevated interest rates from near-zero to their highest in over two decades, the Fed’s recent dovish tone, suggesting fewer rate hikes, is expected to be the main focus when the minutes are released.
In corporate news, ExxonMobil is reportedly on the verge of announcing a colossal acquisition of its rival Pioneer Natural Resources, in a deal approximated at $60 billion, marking the biggest acquisition of the year so far. According to sources, Exxon is set to make a pure stock offer valued at over $250 a share for Pioneer. This acquisition is poised to bolster Exxon’s standing as a leading U.S. oil group, extending its access to the Permian Basin, one of the largest oil fields in the U.S., and ensuring a decade of low-cost production. However, this acquisition is likely to undergo scrutiny from U.S. competition regulators amid a recent uptick in high-profile corporate merger reviews.
On the global oil front, prices hovered around the flatline amid persisting concerns over supply disruptions due to escalated violence in the Middle East. The market stabilized somewhat following a 4% rise in crude benchmark contracts on Monday, although fears of political and economic spillover from the ongoing conflict remain. Traders are also keenly awaiting the U.S. weekly oil inventory data from the American Petroleum Institute, which has been delayed due to the Columbus Day holiday. This data, along with the ongoing geopolitical tensions, continues to influence the oil market, reflecting the complex intertwining of economic and political factors shaping the global financial landscape.
Wednesday Economic Events:
MBA Mortgage Applications 7:00am ET
PPI-Final 8:30am ET – High Volatility Expected
Atlanta Fed Business Inflation 10:00am ET
FOMC Minutes 2:00pm ET – High Volatility Expected
API Crude Oil Data 4:30pm ET
Fed Speaker Scheduled:
Michelle Bowman 4:15am ET
Christopher Waller 10:15am ET
Raphael Bostic 12:15pm ET
Susan Collins 4:30pm ET
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