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Top 5 Things to Know in the Market on Wednesday

EconomyAug 21, 2019 06:22AM ET
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This article has already been saved in your Saved Items - Here are the top five things you need to know in financial markets on Wednesday, 21 August:

1. Fed minutes in focus

The minutes from the Federal Reserve's July meeting will be the focus at 2:00 PM ET (18:00 GMT) on Wednesday, a warm-up act for the Fed's big central banking conference in Jackson Hole that starts Friday.

The Fed cut rates for the first time in a decade in July in what Fed Chairman Jerome Powell referred to as a “mid-cycle adjustment”, disappointing the hopes of President Donald Trump for more aggressive action. Markets see an additional 25 basis point cut in September as certain.

San Francisco Fed President Mary Daly said Tuesday after the market close that she voted for the July rate cut to counter economic headwinds, but said she saw no signs of an imminent recession.

Existing home sales for July are also on the economic agenda, set for release at 10:00 AM ET (14:00 GMT).

2. U.S. futures bounce back with Lowe’s, Target on tap

U.S. futures pointed to a higher open on Wall Street Wednesday, recouping most of Tuesday's losses, with more retail sector earnings due after Home Depot's update yesterday.

Lowe’s (NYSE:LOW) will report earnings ahead of the opening bell a day after home-improvement rival Home Depot (NYSE:HD) cut its sales outlook, partly due to worries over the impact of tariffs.

Target (NYSE:TGT), the second-largest U.S. retailer, will also report ahead of the open, with investors looking for guidance in the wake of Trump’s decision to delay import tariffs on items such as toys and clothes until Dec. 15.

European shares traded higher overnight, Italian stocks leading after the country’s prime minister resigned on Tuesday, potentially paving the way for a new coalition government. Also supporting sentiment, the German government reportedly moved to support the economy by scrapping a “Solidarity Surcharge” on income tax. Germany also sold 30-year bonds with a 0% coupon for the first time.

Asian stocks managed to hold their ground after three days of gains despite a selloff on Wall Street.

3. Walmart sues Tesla over solar panels

Walmart (NYSE:WMT) reportedly sued Tesla over allegations that faulty solar panels installed in hundreds of the retailer’s stores caused multiple fires.

Walmart claimed that fires had broken out at seven of its stores, forcing it to disconnect the solar panels for public safety reasons.

Shares in Tesla (NASDAQ:TSLA) were off 0.7% in premarket trade.

4. Alibaba puts Hong Kong listing on hold due to protests

Chinese e-commerce giant Alibaba Group Holdings (NYSE:BABA) has postponed plans to issue a secondary offering in Hong Kong amid the ongoing political unrest in the city, Reuters reported on Wednesday citing two unnamed people with knowledge of the matter.

Although no new timetable was set, one of the sources suggested that the listing, expected to raise between $10 and $15 billion, could happen as early as October depending on what happens in the Asian financial hub in the meantime.

Hong Kong has held 11 weeks of pro-democracy demonstrations which have on occasion turned violent.

5. Oil trades higher as API inventory data supports

Ahead of official data from the Energy Information Administration (EIA) at 10:30 AM ET (14:30 GMT), the American Petroleum Institute’s report showed that U.S. crude stockpiles fell by 3.5 million barrels last week, sending oil prices higher.

The EIA is expected to report crude stockpiles fell by 1.89 million barrels last week. The report has confounded economists’ estimates lately, rising for the last two weeks despite peak seasonal demand from drivers.

Read more: Can Oil Bulls Set Their Hopes On U.S. Crude Draws? - Barani Krishnan

-- Reuters contributed to this report.

Top 5 Things to Know in the Market on Wednesday

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