Morning: Rebound rally continues ahead of Fed's policy decision

The S&P 500 futures trade 60 points, or 1.4%, above fair value in a continuation of yesterday’s rebound rally ahead of key economic data and the Fed’s policy decision. The latest Russia-Ukraine headlines might be fueling the gains, even as Russia continues to launch missiles at Kyiv.

Briefly, Ukraine President Zelensky said peace talks were sounding more realistic, and Russia’s foreign minister said some parts of a peace deal model are close to an agreement. Mr. Zelensky, however, acknowledged that the two sides are not close to deal while CNBC reminded viewers that Russia’s words should be taken with a grain of salt.

Still, the market appears to be relishing the idea of a ceasefire agreement with talks continuing today and foreign equities sporting big gains. On a related note, President Zelensky is scheduled to speak to the U.S. Congress at 9:00 a.m. ET.

As for today’s data, investors will receive Retail Sales for February ( consensus 0.4%) and Import/Export Prices for February at 8:30 a.m. ET, followed by the NAHB Housing Market Index for March ( consensus 81) and Business Inventories for January at 10:00 a.m. ET.

The FOMC will publish its policy statement and updated economic projections at 2:00 p.m. ET, and Fed Chair Powell will discuss the Fed’s thinking at 2:30 p.m. ET. The Fed is widely expected to raise the fed funds rate by 25 basis points, so investors will listen to Mr. Powell for any hints on future rate hikes and the balance-sheet reduction process.

U.S. Treasuries are holding tight near their flat lines. The 2-yr yield is unchanged at 1.86%, and the 10-yr yield is up one basis point to 2.17%. The U.S. Dollar Index is down 0.6% to 98.51. WTI crude futures are down 0.3% to $96.16/bbl amid news that Russia has softened demands in Iran nuclear deal talks, according to The Wall Street Journal.

In U.S. Corporate news:

  • Smartsheet (SMAR 40.98, -2.51): -5.8% after guiding EPS for Q1 and FY23 below consensus, overshadowing its better-than-expected quarterly results and upbeat revenue guidance for Q1 and FY23.
  • SentinelOne (S 29.50, -1.39): -4.5% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region registered big gains on Wednesday, but none more so than the Chinese markets (which had registered huge losses over the previous two sessions). Japan’s Nikkei: +1.6% Hong Kong’s Hang Seng: +9.1% China’s Shanghai Composite: +3.5% India’s Sensex: +1.9% South Korea’s Kospi: +1.4% Australia’s ASX All Ordinaries: +1.1%.

    • In economic data:

      • Japan’s February Exports +19.1% yr/yr (+21.0% expected; prior +9.6%) and Imports +34.0% yr/yr (+28.0% expected; prior +38.7%); March Reuters Tankan Index 8.0 (prior 6.0)
      • China’s February House Prices +2.0% yr/yr (prior +2.3%); January Industrial Production -0.8% m/m (-1.3% expected; prior -1.3%)
      • South Korea’s February Unemployment Rate 2.7% (prior 3.6%)
    • In news:

      • Hong Kong’s Hang Seng Index soared 9.1% and China’s Shanghai Composite surged 3.5%. Those power moves came on the heels of Wall Street’s positive showing on Tuesday and state media reports touting efforts to stabilize equity markets, including reports of progress with U.S. regulators on a cooperation plan for Chinese stocks listed in the U.S., a push to end the crackdown on Internet platform companies, and providing some stability for the real estate sector.
      • This news vastly overshadowed the festering concerns about an economic slowdown related to lockdowns to stop the spread of COVID in China.
  • Major European indices are sitting on big gains, bolstered by Wall Street’s positive showing on Tuesday and a Reuters report highlighting a view from Russian Foreign Minister Lavrov suggesting some elements of a compromise deal with Ukraine could be close. STOXX Europe 600: +2.7% Germany’s DAX: +3.2% U.K.'s FTSE 100: +1.3% France’s CAC 40: +3.5% Italy’s FTSE MIB: +3.2% Spain’s IBEX 35: +2.2%.

    • In economic data:

      • Germany’s January Current Account Balance EUR11.0 bln (prior EUR24.6 bln)
      • Italy’s February CPI +0.9% m/m (+0.9% expected; prior +1.6%) and +5.7% yr/yr (+5.7% expected; prior +4.8%)
    • In news:

      • Ukraine President Zelenskyy, who will address Congress at 9:00 a.m. ET, said the talks were sounding more realistic and has reportedly acknowledged that joining NATO doesn’t look likely for Ukraine. In any case, market participants are favoring the notion of progress in the talks, evidenced by the rally in equity markets.
      • Lots of attention being paid to whether Russia will make good on interest payment due today in U.S. dollars.

U.S. equity futures:

  • S&P 500 Futures: +54 @ 4,317
  • DJIA Futures: +388 @ 33,926
  • Nasdaq 100 Futures: +241 @ 13,700


  • Europe: DAX +3.2%, FTSE +1.3%, CAC +3.5%
  • Asia: Nikkei +1.6%, Hang Seng +9.1%, Shanghai +3.5%


  • Crude Oil -0.22 @ 96.22
  • Nat Gas +0.086 @ 4.654
  • Gold -2.15 @ 1927.55
  • Silver -0.065 @ 25.093
  • Copper +0.0990 @ 4.6120
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