Here are five things you must know for Monday, March 14:
1. -- Stock Futures Power Higher On Progress in Russia-Ukraine Talks, Oil Prices Pullback
U.S. equity futures powered higher Monday, while Treasury bond yields leapt ahead of this week's Federal Reserve rate decision and oil prices retreated on progress in talks between Russian and Ukraine.
Both sides of the conflict in eastern Europe, which began as a so-called 'special operation' by Russian forces, are scheduled to meet again today following weekend talks that yielded at least some progress in terms of establishing a framework for a ceasefire, but were complicated by an attack by Russia near the Polish border and reports that Moscow has reached out to Beijing for support in its military effort as its finances are squeezed by the impact of international business and economic sanctions.
"We are communicating directly, privately to Beijing, that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them," said U.S. National Security Adviser Jake Sullivan said. "We will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world."
Oil prices retreated sharply in early Monday trading, with Brent crude contracts for May delivery falling $3.26 to $109.48 per barrel, on both optimism linked to negotiations in Ukraine and bets on fading demand from China, where a new outbreak of coronavirus cases is triggering lockdowns in major city centers -- including Shenzen, home to 13 million people -- despite the government's 'zero Covid' policies.
Benchmark 10-year Treasury note yields were also on the move, rising to 2.053% in overnight trading, following last week's reading of U.S. inflation, the fastest in forty years, and ahead of Wednesday interest rate decision from the Fed, which is expected to be the first of between three and five rate hikes between now and the end of the year.
On Wall Street, futures futures contracts linked to the Dow Jones Industrial Average, fresh off its fifth consecutive losing week -- the worst in three years -- are indicating a 390 point opening bell gain while those linked to the S&P 500, which is down 11.8% for the year, are priced for a 47 point bump.
The tech-focused Nasdaq Composite is looking at a more muted gain of around 125 points as benchmark 2-year Treasury note yields rose to $1.791% in overnight trading.
2. -- Week Ahead: Fed Rate Move In Focus As Inflation Soars, Growth Slows
The Fed's two-day policy meeting, likely culminating with the central bank's first interest rate hike in four years, will dominate an active week for corporate earnings and economic data as investors continue to grapple with the impact of faster inflation and slowing growth inside the world's biggest economy.
Wednesday's rate hike, which will lift the Fed Funds rate to a range of between 0.25% and 0.5%, is all but assured from comments from Chairman Jerome Powell earlier this month, with investors now focused on the Fed's track of inflation data, as well as the changing labor market, for clues on follow-on hikes between now and the end of the year.
In the meantime, markets will digest a key reading on factory gate inflation Tuesday, retail sales on Wednesday, initial jobless claims Thursday and existing home sales data on Friday.
Earnings from FedEx (FDX), Nike (NKE) and Dollar General (DG) round out a muted week in terms of earnings, with markets looking to a sharp slowdown in corporate profit growth -- from 32% in the four quarter of last year to just 6.4% over the three months ending in March -- to match the Atlanta Fed's current GDP growth forecast of around 0.5%.
3. -- Ford Shares Edge Lower As Carmakers Makes Another EV Batter Deal
Ford Motor Co. (F) shares edged lower in pre-market trading after the carmaker agreed a memorandum of understanding with South Korea's SK On and Turkey's Koc Holding to develop an electric vehicle batter plant in southeastern Europe.
The new plant, set to begin operations in 2025, will produce between 30 to 45 gigawatt hours of batter power, the companies said, and augment SK's existing operations in the U.S., China and South Korea.
Ford said earlier this month that it will boost its planned EV investment total by two thirds, to $50 billion, and run its legacy combustion engine business separately from its electrified division as the carmaker aims to capture around a third of the world's annual EV production by 2026.
Ford shares were marked 0.25% lower in pre-market trading to indicate an opening bell price of $16.00 each, a move that would extend the stock's two-month decline to around 36.5%.
4. -- Bitcoin Steady As Musk Holds, EU Lawmakers Mull Major Rule Changes
Bitcoin prices edged high Monday ahead of a key vote by European lawmakers on new regulatory framework for crypto assets that some see as the first step towards an all-out ban on digital coins in the world's biggest economic bloc.
The European Union's Economic and Monetary Affairs Committee is set to vote on a policy recommendation known as MiCa, which would demand "minimum environmental sustainability standards" for crypto assets traded in the bloc.
The rule change, if ultimately adopted, would mean "proof of work" crypto assets, such as bitcoin and ethereum, would be likely be unable to demonstrate their alignment, given the ever-increasing computing power required to validate each transaction on the blockchain.
Bitcoin prices were given a boost, however, from comments made on the verified Twitter account of Tesla (TSLA) CEO Elon Musk, who told his 77.6 million followers that "I still own & won't sell my Bitcoin, Ethereum or Doge fwiw", given his concerns for rising inflation and weakening currencies.
Bitcoin prices were last seen 0.3% higher on the Monday session and changing hands at $39,050.01 each.
5. -- Tom Brady To Return For 23rd NFL Season, Cites "Unfinished Business".
If a week is a long time in politics, then its seems that forty days is a lifetime in sports - and a period long enough for one of the most accomplished athletes in history to reconsider his retirement prospects.
Tom Brady, the seven-time Super Bowl winning quarterback, said late Sunday he will return to the Tampa Bay Buccaneers for his 23rd NFL season this fall -- just six weeks ahead announcing his retirement -- citing "unfinished business" in America's most-popular sport.
"These past two months I've realized my place is still on the field and not in the stands,'' Brady, 44, wrote on his verified Instagram account. "That time will come. But it's not now. I love my teammates, and I love my supportive family. They make it all possible. I'm coming back for my 23rd season in Tampa.''
Tampa head coach Bruce Arians said he was "ecstatic" with Brady's decision to return, while bookmakers in Las Vegas halved their odds on the Bucs to win Super Bowl LVII, which now stand at 10 to 1.
