Stock futures rise slightly after S&P 500’s third straight losing day

Raymond James demotes Medtronic

Raymond James downgraded Medtronic shares to market performance on Wednesday. The company cited deteriorating confidence in the medical device maker’s growth potential among the reasons for the change in outlook.

The downgrade comes after the company beat analysts’ estimates last quarter but posted a year-over-year revenue decline as it grapples with supply chain issues.

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— Samantha Subin

Housing market still under pressure, but there are some minor signs of optimism

Demand for mortgages fell again last week, but there are signs that the sharp decline in the housing market is bottoming out.

Government mortgage applications actually rose 4% last week, according to the Mortgage Bankers Association, showing some strength among first-time home buyers even as mortgage rates rose.

On the corporate front, shares of Toll Brothers fell 2.6% in premarket trading after third-quarter home sales fell short of expectations and the homebuilder lowered its forecast for the whole year. But the company’s CEO said there were “signs of increased demand” in August.

Pending home sales data due out at 10 a.m.

—Jesse Pound

Expect some market stability after Jackson Hole, says Wells Fargo

The market will likely regain some stability after Fed Chairman Jerome Powell delivers his remarks Friday in Jackson Hole, Wyoming, Wells Fargo’s Christopher Harvey said in a note Wednesday.

“Fed fears should peak and one (perhaps both) of the recent rate drivers is easing. Until then, interest rate trends and liquidity suggest a bit more ‘hash’ “, did he declare.

The market rallied after bottoming in mid-June, but has recently struggled amid renewed fears that the Fed may have to keep raising rates for longer than expected.

“In our opinion, the Jackson Hole takeout will be in the eye of the beholder: Hawks will focus on hawkish statements (and vice versa for the Doves),” Harvey said.

Fred Imbert

Time to buy Frontier, says Morgan Stanley

Morgan Stanley thinks the time is right to buy shares of Frontier.

Analyst Ravi Shanker took over coverage of the low-cost airline with an overweight rating, calling the company the “ultimate” ultra-low-cost carrier now that its failed merger with Spirit is behind it.

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— Samantha Subin

The ‘market tussle continues’, says BTIG’s Krinsky

BTIG’s chief market technician, Jonathan Krinsky, said the market “continues to be in a tussle between economic data and what the Fed could potentially do.”

Recent economic data has been weaker than expected “causing a bid on bonds and the perception that Powell could be ‘less hawkish’ in Jackson Hole,” Krinsky noted. “That might be enough to keep equities bidding…but it’s not necessarily a medium-term ‘bullish’ scenario if the ecological data continues to weaken.”

—Fred Imbert

European markets stagnate as global investors wait for the Fed

European markets were muted on Wednesday as further hawkish comments from a U.S. Federal Reserve policy official kept investors hesitant.

The pan-European Stoxx 600 index was stable at the start of the session, with telecoms losing 0.5% while household goods gained 0.2%.

-Elliot Smith

Morgan Stanley says the ‘smart’ electric vehicle industry is the next big thing in tech. Here are his top stock picks

Morgan Stanley says tech supply chains are poised for growth in the next big thing: smart tech features — from EV batteries to chips and self-driving technology.

The investment bank named its top picks of stocks that should benefit from this trend.

Pro subscribers can read the story here.

—Weizhen Tan

Fed’s Kashkari says his biggest fear is that inflation will be more persistent or hotter than expected

Minneapolis Federal Reserve Chairman Neel Kashkari said his biggest fear was that markets are underestimating the level of inflation or its persistence, adding that the Fed may need to be more aggressive than expected.

“The big fear I have deep down inside is that we get it wrong and the markets get it wrong, and that inflation is much more entrenched at a much higher level than we like or the markets like,” he said, commenting on the market. inflation expectations returning to 2% in the next two years.

“Then we will have to be more aggressive than I expected, probably longer, to bring inflation down,” he said at an event at the University of Pennsylvania.

Kashkari also pointed to supply-side shocks behind “one-half to two-thirds” of the country’s high inflation.

“The more supply-side help we get, the less the Fed has to do and the better we are able to avoid a hard landing,” he said. He added, however, that there is evidence that supply chains are starting to normalize.

Kashkari is already seen as the most hawkish of the 19 U.S. central bank policymakers and expects the Fed to raise its key rate – now within a target range of 2.25% to 2.5% – another two points percentage by the end of next year.

– Jihye Lee

CNBC Pro: Citi names energy stock with ‘strongest balance sheet’

The energy sector was a big winner in this year’s volatile stock market.

But a stock always stands out for its “strongest track record,” according to Citi. It also posted a set of second-quarter profits that easily beat its major listed peers.

Pro subscribers can read the story here.

— Zavier Ong

Fed Hawkish?

Many expect hawkish rhetoric from Fed officials later this week, which could trigger a sell-off in risky assets. Some worry that continued aggressive central bank tightening could tip a slowing economy into recession.

“I expect Fed Chairman Jay Powell and other Fed officials to remain hawkish,” Invesco’s chief global markets strategist Kristina Hooper said in an email. . “Aggressive rhetoric would be very likely to drag global equities down in the near term, as markets are walking on eggshells, so asset owners need to be prepared for near-term volatility.”

—Yun Li

Nordstrom shares fall

Nordstrom shares fell more than 13% in extended trading after the company cut its full-year financial guidance. Nordstrom said it was facing excess inventory as well as slowing demand.

“Customer traffic and demand slowed significantly beginning in late June, primarily at Nordstrom Rack,” CEO Erik Nordstrom said in a press release.

However, the company reported earnings and sales for the fiscal second quarter ahead of analysts’ estimates.

—Yun Li

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