Here are the most important news items that investors need to start their trading day:
1. 16-year high
2. Fed up yet?
U.S. Federal Reserve Chairman Jerome Powell takes questions from reporters during a press conference after the release of the Fed policy decision to leave interest rates unchanged, at the Federal Reserve in Washington, U.S, September 20, 2023.
Evelyn Hockstein | Reuters
Fed Chairman Jerome Powell said Thursday inflation is still — still! — too high but that the central bank sees its monetary policy working and that it would be “resolute” in its commitment to reaching 2%. The Fed’s strategy of aggressively hiking rates to cool decades-high inflation has seen the pace of monthly increases decelerate and the annual rate slow to 3.7%. “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said in a speech to the Economic Club of New York. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.” Powell said achieving the Fed’s 2% goal would likely require “a period of below-trend growth.”
3. Big bank layoffs
Goldman Sachs headquarters in New York, US, on Thursday, July 6, 2023.
Michael Nagle | Bloomberg | Getty Images
The biggest U.S. banks are a little smaller these days — at least in terms of workforce. Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs have all reduced their employee headcounts this year by anywhere from about 2% to more than 5%, according to analysis by CNBC’s Hugh Son. The cuts amount to 20,000 jobs altogether and come after a hiring boom on Wall Street. That, combined with lower attrition rates, had left many firms with more workers than expected. And with the possibility of rising loan defaults looming, lenders could be forced to make deeper cuts in 2024.
4. ‘Worldwide caution’
U.S. President Joe Biden delivers a prime-time address to the nation about his approaches to the conflict between Israel and Hamas, humanitarian assistance in Gaza and continued support for Ukraine in their war with Russia, from the Oval Office of the White House in Washington, U.S. October 19, 2023.
Jonathan Ernst | Reuters
The U.S. State Department on Thursday issued a worldwide caution alert, highlighting growing conflict in the Middle East and elsewhere as the Israel-Hamas war approaches the two-week mark. The department warned that Americans abroad should exercise increased caution, citing the “potential for terrorist attacks, demonstrations or violent actions against U.S. citizens and interests.” U.S. citizens who are seeking help to leave Israel, the West Bank, Gaza or other areas can complete a crisis intake form with the State Department. Meanwhile President Joe Biden said Thursday night he’d be sending Congress an “urgent budget request to fund America’s national security needs” to support Israel and Ukraine. Follow live updates from the Israel-Hamas war.
5. (She)in the spotlight
Clothes at the Shein headquarters in Singapore on June 19, 2023.
Ore Huiying | Bloomberg | Getty Images
Fast fashion retailer Shein is inching its way toward a likely IPO and wading through a handful of challenges in the run-up. CNBC’s Gabrielle Fonrouge reports the company — a growing Amazon competitor — is facing questions over its ties to China, environmental impact and potential copyright violations, as well as the use of forced labor across its supply chain by the Uyghur ethnic group in the Xinjiang region of China. According to Matt Kennedy, a senior IPO market strategist for Renaissance Capital, those questions could cloud the value proposition if and when Shein decides to list on U.S. exchanges: “IPO investors right now want to see a straightforward story.”
— CNBC’s Pia Singh, Jeff Cox, John Melloy, Hugh Son, Amanda Macias and Gabrielle Fonrouge contributed to this report.
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