June S&P 500 futures (ESM23) are up +0.53%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.96% this morning after three major U.S. benchmark indices closed sharply lower on Wednesday as Federal Reserve Chair Jerome Powell dismissed market bets on rate cuts later this year following the central bank’s widely expected 25 basis point rate hike. 

The Federal Reserve raised interest rates by 25 basis points to a range of 4.75% to 5.00% on Wednesday, the highest level since September 2007. At the same time, Federal Reserve Chairman Jerome Powell said Fed officials don’t see rate cuts this year as “inflation pressures continue to run high,” adding that the Fed is ready to raise rates higher than expected if it “needs to.” Also, the Fed cut its 2023 GDP forecast to 0.4% from 0.5% in December and increased its 2023 core PCE forecast to 3.6% from 3.5% in December. However, the Fed kept the “terminal rate” forecast unchanged from the last estimate in December at 5.1%, signaling only one more hike this year.

“The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” the FOMC’s post-meeting statement said.

Meanwhile, Powell said the U.S. banking system is sound but noted that recent developments would likely tighten credit conditions. Mr. Powell added the Fed will use all tools to ensure that bank deposits remain “safe and sound.”

U.S. Treasury Secretary Janet Yellen told lawmakers on Wednesday that the Federal Deposit Insurance Corporation was not considering insuring all uninsured bank deposits following the collapse of two prominent U.S. banks this month.

Today, all eyes are focused on the U.S. New Home Sales data in a couple of hours. Economists, on average, forecast that February New Home Sales will come in at 650K, compared to the previous value of 670K.

Also, investors will likely focus on the U.S. Current Account data, which stood at -217.1B in the third quarter. Economists foresee the new figure to be -213.2B.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 197K, compared to last week’s value of 192K.

In the bond markets, United States 10-Year rates are at 3.485%, down -0.44%.

The Euro Stoxx 50 futures are down -0.19% this morning as market participants digested the latest interest rate hike by the U.S. Federal Reserve and comments from Fed Chair Jerome Powell ahead of the Bank of England interest-rate decision. Also, the Swiss National Bank hiked its key rate by 50 basis points to 1.50% and warned that further hikes may be needed “to ensure price stability over the medium term.” The Bank of England meets later in the session and is widely expected to raise interest rates by a quarter point to 4.25%, especially after U.K. headline inflation unexpectedly rose above 10% in February. Meanwhile, Citigroup downgraded Europe’s banking sector to neutral from overweight as “the ongoing confidence crisis could limit banks’ risk appetite and reduce the flow of credit.”

The European economic data slate is mainly empty on Thursday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.64%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.17%.

China’s Shanghai Composite today closed higher as major technology stocks gained ground, boosted by an over +8% jump in Tencent Holdings Ltd after the company reported better-than-expected fourth-quarter revenue. At the same time, major property stocks plunged after China Evergrande Group’s long-awaited debt restructuring plan failed to address investor concerns. 

Japan’s Nikkei 225 Stock Index closed lower as concerns about the global banking sector continued to weigh on sentiment, and the yen strengthened following the Fed’s monetary policy decision. The index’s downward momentum was fueled by losses in the Transport, Gas & Water, and Steel sectors. Also, investors remained focused on the Japanese consumer inflation reading due on Friday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 10.18% to 20.48.

Pre-Market U.S. Stock Movers

Sqz Biotechnologies Co (SQZ) surged over +13% in pre-market trading after the company announced that a confirmed complete response was observed in the first patient in the lowest-dose cohort of the Phase 1 SQZ-AAC-HPV-101 clinical trial. 

KB Home (KBH) rose more than +2% in pre-market trading after the company reported upbeat Q1 results and issued strong 2023 guidance.

Steelcase Inc (SCS) gained over +3% in pre-market trading after the company reported upbeat Q4 results and posted better-than-expected Q1 and FY24 EPS guidance.

Chewy Inc (CHWY) fell over -6% in pre-market trading after the company’s cautious 2023 EBITDA guidance and some active customer attrition overshadowed better-than-expected Q4 results.

Samsara Inc (IOT) dropped about -2% in pre-market trading after Morgan Stanley downgraded the stock to equal weight from overweight.

You can see more pre-market stock movershere

Today’s U.S. Earnings Spotlight: Thursday - March 23rd

Accenture (ACN), General Mills (GIS), Darden Restaurants (DRI), FactSet Research (FDS), BRP Inc (DOOO), Commercial Metals (CMC), Valneva SE (VALN), Ventyx Biosciences (VTYX), Oxford Industries (OXM), Scholastic (SCHL), Arcellx (ACLX), Seabridge Gold (SA), Movado (MOV), ADMA Biologics Inc (ADMA), REX American Resources (REX), Harrow Health (HROW), Erasca (ERAS), Amprius Tech (AMPX), Celcuity (CELC), Alpine Immune Sciences (ALPN), Gambling.com Group (GAMB), Vera Therapeutics (VERA), Priority Tech (PRTH), Vasta Platform (VSTA), Torrid Holdings (CURV), Innate Pharma (IPHA), Heron Therapeuti (HRTX), 111 Inc (YI), Planet 13 (PLNHF), OppFi (OPFI), Invivyd (IVVD), Ouster (OUST).

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