*
STOXX 600 up 0.8%
*
Oil, chemicals soar in Europe
*
Market positive on Powell remarks
*
U.S. stock futures inch lower
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us at
BED BATH & BEYOND GLEEFUL: SHORT SELLERS RECOUP MOST YTD
LOSSES (1215 GMT)
Bearish investors in troubled home goods retailer were
vindicated on their bet on Bed Bath & Beyond Inc on
Tuesday.
The retail punters' darling posted its steepest one-day
percentage decline ever in the previous session that fetched
short sellers $172 million in paper gains, according to S3
Partners.
That would wipe out the majority of short sellers'
year-to-date losses of $203 million prior to Tuesday's action.
For reference, short sellers pocketed $179 million in
mark-to-market profits in 2022, a return of 73%.
Bed Bath & Beyond raised about $225 million in an equity
offering and may get another $800 million over the next 10
months in an attempt to stave off bankruptcy.
Often touted on online forums by individual investors, the
meme stock jumped about 360% from its multi-decade lows in early
January to up to Monday's close.
(Medha Singh)
*****
GENEROUS ECB (1039 GMT)
The European Central Bank turned out to be more generous
than expected in setting the new ceiling for remuneration of the
euro area government deposits and markets are reacting
accordingly.
The central bank announced yesterday that it would pay the
short-term euro rate (€STR) minus 20 basis points, taking effect
on 1 May 2023.
“Under the previous arrangement, the ceiling was supposed to
go back to 0% on the same date,” Citi analysts noted.
Sovereign deposits remuneration “is at the generous side of
the range of outcomes we had sketched,” says Christopher Rieger,
head of rates and credit research at Commerzbank.
“This is taking the edge out of the latest re-emergence of
scarcity fears that had become more visible in higher demand for
longer-dated BuBills since the start of this week,” he adds.
In September, the ECB decided to temporarily set the ceiling
for the remuneration of government deposits held with the
Eurosystem at the euro short-term rate (ESTR) from previous 0%.
Analysts argued that a zero per cent remuneration boosted
demand for top-rated government bonds applying downward pressure
on their yields.
(Stefano Rebaudo)
*****
ALL SECTORS FLASH GREEN IN EUROPE (0909 GMT) All sectors are ticking higher in Europe today, as the STOXX 600 soars to its highest since April 2022, boosted by the oil and gas sector , which is up 1.5% after another set of bumper results from France's Total and Norway's Equinor .
The chemicals sector is getting a helping hand from British industrial gas company Linde and Dutch paints and coatings company Akzo Nobel . Meanwhile, Federal Reserve Chair Jerome Powell's speech is still permeating the wider market with a positive mood.
BP is providing a boost to the index on a net
weighted points basis, with shares rising 3.2% to their highest
since August 2019 after the oil major reported record profits
for 2022 on Tuesday.
Finnish refiner Neste is top riser, up 8.9% after
the company posted comparable fourth-quarter core operating
results that beat analysts' forecasts.
Not all stocks are enjoying the optimism. Dutch payments
processor Adyen's shares are at the bottom of the
index after missing analysts' expectations, while shares in
Handelsbanken are down 6.3% after the Swedish bank
reported in-line profits but higher-than-expected costs.
(Lucy Raitano)
*****
THE POWELL PUT (0752 GMT)
Wall Street must be hoping Federal Reserve Chair Jerome
Powell would speak in public every day. Given a chance to react
hawkishly to the bumper January payrolls report, Powell demurred
and chose to stay boringly balanced on the rate outlook.
Asked if he regretted using "disinflation" 11 times in his
media conference last week, he said no, he would do the same
again.
He reiterated the "disinflationary process" was under way,
but it would likely take a "significant" period of time and if
the data kept coming in stronger than expected, the Fed would
have to do more on rates.
Hardly earth shattering stuff, but for markets these days if
Powell is not all-out in-your-face hawkish, then he's dovish.
There's no middle ground. Wall Street duly rallied while
Treasury yields and the dollar have eased a little, with futures
priced for just two more hikes to 5.0-5.25%.
Meanwhile, the yen has had a good 24 hours which some put
down to yesterday's report of strong wages figures, a sea-change
for a market that has spent years ignoring Japanese data because
nothing ever happened in them.
Nominal total cash earnings grew 4.8% y/y last quarter, the
fastest since January 1997, thanks to an outsized 7.6% jump in
December bonuses.
Faster pay growth in the spring labour talks is seen as an
essential condition for the Bank of Japan (BOJ) to scale back
its massive monetary stimulus.
Calls by Prime Minister Fumio Kishida for companies to raise
wages seem to actually have had some effect with some big names
pledging large rises recently.
On Tuesday, video game maker Nintendo Co Ltd said it plans to lift workers' base pay by 10% even as it cut its profit outlook. It was rewarded today by the market knocking its shares down 8%.
Key developments that could influence markets on Wednesday: - Fed's Williams, Cook, Bostic, Barr, Kashkari and Waller all speak, with Waller and Williams likely to carry the most weight with markets - Earnings from Uber and Walt Disney, which will be the first result with Iger back in charge
(Wayne Cole)
*****
EUROPE EYES SOLID START AS OIL PROFITS CONTINUE TO ROLL IN
(0740 GMT)
European stocks are set for a solid start with March futures contracts up 0.8%, wiping out Tuesday's losses and then some.
Some blockbuster earnings are rolling in from France. Oil major TotalEnergies posted a record adjusted net profit continuing a spate of positive earnings for the sector, which also includes the latest from Norway's Equinor .
Meanwhile France's third biggest bank Societe Generale posted higher-than-expected profit in the fourth
quarter, and another bank - Italian state-owned Monte dei Paschi
di Siena - has also outdone expectations with its
larger-than-expected quarterly profit.
In a speech on Tuesday, Fed chair Jerome Powell, while
acknowledging that interest rates may need to move higher, still
struck a less hawkish tone than had been feared which sent
stocks higher on Wall Street overnight and on Wednesday in Asia
and weighed on the dollar.
A warning signal came from the UK's largest housebuilder
Barratt Developments Plc , after it flagged persisting
market uncertainty as high mortgage rates weigh on demand and a
sharp fall in house prices dent margins.
(Lucy Raitano)
*****
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. terminal rate Yields vs stocks The Great Rate Race DE2Yy ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
