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Coffee With Greta: Traders Brace For Big Week


DJIA Futures: -145 (-0.4%)

SPX Futures: -33 (-0.8%)

NASDAQ Futures: -138 (-1.1%)

Good morning friends!

Futures are lower as traders gear up for a big week of earnings, the Fed decision, and new jobs data.

Let’s get right to it!

Big Week For Traders

Wall Street may be in for a wild ride this week as earnings season picks up and the Fed meets.

The Fed meeting kicks off on Tuesday with the rate hike decision set to be released Wednesday.

CME Group’s FedWatch Tool shows 98.1% of traders expect a 25 basis point hike.

That survey shows the market pricing in one more 25 basis point move at the next meeting and then traders are split on if the central bank will pause rate hikes after that. 

This week also includes key jobs data, something the Fed has been watching closely. 

The official January jobs report comes out Friday morning, with ADP’s private employment report on Wednesday morning.

And it will be the busiest week of earnings yet starting with results from Exxon Mobil (XOM), Pfizer (PFE), UPS (UPS), McDonald’s (MCD), Caterpillar (CAT), and General Motors (GM) Tuesday morning.

Yields Rise Ahead Of Fed Meeting

Treasury yields are rising today as traders sell off bonds ahead of the Fed meeting. 

The 2-year yield is up 5 basis points to 4.25% while the 10-year yield is up 3 basis points to 3.55%. 

The market is anticipating the smallest rate hike from the Fed since it began the current tightening cycle last May. 

But concern is rising on Wall Street that the bank will over-tighten and plunge the economy into a recession. 

The latest inflation data has shown the Fed’s rate hikes having an impact on prices. 

But Fed officials have maintained the bank’s stance that rates still need to rise further before pausing.

Ford Cuts Mustang Mach-E Prices

Ford (F) shares are slipping 2.4% ahead of the open after announcing it will increase production and cut prices of its electric Mustang Mach-E. 

The automaker said this morning that the price cuts will range from $600 to $5,000 depending on the model.

The Mach-E starting price will now range from $46,000 to $64,000.

The move follows Tesla’s (TSLA) decision to cut prices on its Model Y earlier this month. 

The chief customer officer of Ford’s EV business said, “We are responding to changes in the marketplace. As we look and want to stay competitive in the marketplace, we’re having to respond.”

But the cuts mean some models of the Mach-E will not be profitable on a per-unit basis.

The company will also increase production to 130,000 units annually from 78,000 currently.

Philips Cuts 6,000 Jobs

Philips (PHG) shares are rallying 5.7% in premarket trade after announcing job cuts. 

The Dutch health technology company said today it will lay off 6,000 employees. 

The move is meant to lower costs and restore its profitability after a recall of respiratory devices knocked 70% off of its market value. 

Half of those cuts will be made this year with the other half by 2025. 

The company’s new CEO said the cuts are a “necessary intervention to help us to become competitive and lean in the way we go forward in the market.”

The latest move comes on top of Philips’ announcement to cut 4,000 jobs last October.

In Case You Missed It

  • Lucid Group (LCID) shares skyrocketed 43% on Friday amid takeover rumors. The stock was halted several times throughout the session as trading volume jumped to nearly eight times the average. A stock research blog speculated that Saudi Arabia Public Investment Fund would acquire the electric automaker. LCID shares are up 0.9% ahead of the open today.

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