Here are the most important news, trends and analysis investors need to start their trading day:
1. Dow ready to rebound, appears to end four-day stoppage streak
A screen shows Federal Reserve Chairman Jerome Powell speaking as traders work in a position on the floor of the New York Stock Exchange (NYSE), August 27, 2021.
Brendan McDermid | Reuters
Dow futures rose 200 points as investors wait for clues on Wednesday afternoon from the Federal Reserve on when it could start cutting back its massive purchases of Covid-era bonds. The Dow Jones Industrial Average and S&P 500 looked set to end a three-day losing streak on Tuesday afternoon, but closed lower. The Nasdaq was able to close higher, ending a two-game losing streak. For the month, the Dow, S&P 500 and Nasdaq are down 4%, just over 3.7% and nearly 3.4%, respectively. Monday’s plunge on Wall Street worries the Fed, Chinese real estate group Evergrande and the fight against Washington’s debt ceiling accelerated September’s fall.
2. The Fed should signal a slowdown and provide quarterly forecasts
Federal Reserve Chairman Jerome Powell testifies during a hearing of the United States House Oversight and Reform Subcommittee on the coronavirus crisis at Capitol Hill in Washington, United States on 22 June 2021.
Graeme Jennings | Reuters
The Fed concludes its two-day meeting in September on Wednesday, releasing its latest policy statement as well as its quarterly economic and interest rate forecast at 2 p.m. ET. Fed Chairman Jerome Powell is expected to brief the media 30 minutes later. The central bank is expected to broadly indicate that it is preparing to announce a timetable to cut its $ 120 billion in monthly treasury bill and mortgage-backed securities purchases. No change in rates close to zero is expected. Powell said the increase in borrowing costs will be considered separately from the reduction.
3. Chinese Evergrande pays interest on a domestic bond
The headquarters of the China Evergrande group in Shenzhen, China’s Guangdong province, February 9, 2021.
Shen Longquan | China Visual Group | Getty Images
Struggling China Evergrande agreed to settle interest on a domestic bond on Wednesday, as China’s central bank pumped liquidity into the banking system, easing fears of looming financial contagion from the indebted property developer. Evergrande’s debt problems are unlikely to have the same consequences as the collapse of US investment bank Lehman Brothers in 2008, analysts say. When it comes to the magnitude of the potential impact on international markets, analysts point out a major difference between the Evergrande crisis and the Lehman collapse: Evergrande owns land, while Lehman held financial assets.
4. House Dems Pass Bill to Avoid Closure and Suspend Debt Limit
House Speaker Nancy Pelosi, D-Calif., Holds her weekly press conference at the Capitol Visitor Center on Wednesday, September 8, 2021.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
The House passed a bill to prevent a federal government shutdown and suspend the debt limit in a step toward preventing possible economic calamity. Tuesday’s vote was 220-211, with all Democrats supporting it and all Republicans opposing it. As the measure heads to the Senate, Republicans threaten to block it, which could leave Democrats scrambling to find another way forward. Congress must adopt a fundraising plan by September 30 to prevent a shutdown. The United States will also exhaust all options to continue paying its bills sometime in October, Treasury Secretary Janet Yellen told congressional leaders.
5. Pfizer Provides 500 Million Additional Covid Vaccine Doses To US For Donation
A vial of Pfizer-BioNTech Covid-19 vaccine is seen at a pop-up vaccination clinic in the Arleta neighborhood of Los Angeles, California on August 23, 2021.
Robyn Beck | TBEN | Getty Images
The American company Pfizer and its German partner BioNTech announced on Wednesday that they would provide an additional 500 million doses of their Covid vaccine to the United States government, which in turn will donate them to low-income countries. The move expands the existing agreement between the companies and the United States to provide additional doses of the vaccine at a non-profit price to less advantaged countries. It also brings the total number of doses to be donated to these countries to 1 billion. President Joe Biden is expected to hold a virtual summit with world leaders on vaccines on Wednesday.
– Reuters contributed to this report. Follow all the market action like a pro on TBEN Pro. Get the latest pandemic news with TBEN’s coronavirus coverage.