Daily Markets: Markets in Holding Pattern Ahead of Fed Rate Decision This Week

Investor sitting at computer

Today’s Big Picture

Asia-Pacific equity indexes ended today’s session up across the board. China’s Shanghai Composite gained 0.22%, Japan’s Nikkei rose 0.44%, South Korea’s KOSPI advanced 0.52%, Taiwan’s TAIEX closed ahead 0.86% and India’s Sensex added 0.98%. Hong Kong’s Hang Seng and Australia’s ASX All Ordinaries gained 1.16% and 1.17% led by Gaming and Technology names, and Materials and Communications names, respectively. By mid-day trading, European equity indices are down across the board and US futures point to a soft open later this morning. 

Market watchers continue to wait for the Federal Reserve’s monetary policy decision, Economic Forecast update and Fed Chair Powell’s comments, the confluence of which will shape expectations for the coming quarters. Following last night’s inflation data out of Japan, this morning’s hot inflation data out of Germany and Sweden’s central bank hiking interest rates by a full point, it’s hard to see the Fed backing down from its “go bigger, go longer” until the inflation fight is done. Even though the Fed has been telegraphing this over the last several weeks, given current GDP and earnings expectations, especially for the S&P 500, this could still be a tough pill for some to swallow as markets look ahead to 2023. Periods of revisions, especially downward ones, for those items tend to result in market indigestion as well. While some may be bracing for the worst and hoping for the best, we can all agree that the message Fed Chair Powell sends in tomorrow’s presser will be critical. 

Data Download

International Economy

Surging food and fuel costs led Japan’s annual inflation rate 3.0% in August, up from 2.6% in July marking the 12th consecutive monthly increase in consumer prices and the fastest pace since September 2014. The August core consumer price index in Japan, which excludes fresh food but includes fuel costs, jumped 2.8% YoY, with expectations for a 2.7% rise and accelerating from July’s 2.4% gain.

The annual producer inflation in Germany rose to a new record high of 45.8% in August, up from 37.2% the prior month as energy prices continued to climb. Energy prices remained the biggest upward contributor (139.0% vs 105.0% in July), namely the distribution of natural gas (209.4%) and electricity (174.9%). Excluding energy, producer prices climbed 14.0% YoY during the month. On a sequential basis, Germany’s producer inflation accelerated to +7.9% in August, vs. 5.3% in July.

Sweden’s Riksbank on Tuesday launched a 100-basis point hike to interest rates, taking its main policy rate to 1.75%, as it warned that “inflation is too high.” The central bank shared monetary policy will need to be tightened further to bring inflation back to its 2% target and forecast further increases to interest rates over the next six months.

Domestic Economy

At 8:30 AM ET, the August Housing Starts and Building Permits data will be published, and it's expected to see total Housing Starts fall 9.6% MoM. As readers likely suspect, the upward move in interest rates has led to significantly higher mortgage rates vs. this time last year, making housing incrementally more expensive. New mortgage originations have come under pressure and yesterday’s NAHB Housing Market Index for September came in at 46, below the expected 47 reading. Not only does that continue the steady decline that began with the January 2022 reading, but it clearly points to a contracting housing market as the August print was the second month below the 50 level. 


Yesterday, the major stock market averages squeezed out decent gains by the close, but market breadth still painted a mixed picture and decliners outpaced advancers by a 4-to-3 margin at the Nasdaq while advancers led decliners by a roughly 3-to-2 margin at the NYSE. Only two S&P 500 sectors closed with a loss, health care (-0.5%) and real estate (-0.2%), and the gainers were led by materials (+1.6%) and consumer discretionary (+1.3%). Here’s how the major market indicators stack up year-to-date:

  • Dow Jones Industrial Average: -14.64%
  • S&P 500: -15.18%
  • Nasdaq Composite: -26.27% 
  • Russell 2000: -19.26%
  • Bitcoin (BTC-USD): -57.84%
  • Ether (ETH-USD): -62.58%

Stocks to Watch

Before trading kicks off for U.S.-listed equities, Apogee Enterprises (APOGwill be among the companies issuing their latest quarterly results and guidance. 

Nvidia (NVDA) CEO Jensen Huang will give a keynote address at the GTC 2022 Conference. Also today, Salesforce (CRMholds its annual DreamForce conference and Sumo Logic (SUMO) hosts its own Investor Day.

Shares of Ford Motor (F) came under pressure last night after the company disclosed its inflation related supplier costs will run around $1 billion higher than expected in the current quarte,r and it expects to have 40,000-45,000 vehicles in inventory exiting the current quarter that lack certain supply constrained components. On a positive note, Ford reiterated its full-year 2022 expectation for adjusted EBIT between $11.5-$12.5 billion.

Meanwhile, Cognex (CGNX) upped its outlook for the current quarter because it has been able to fulfill customer demand sooner than expected as it overcame a previously disclosed fire at one of its manufacturing partners. The company sees its September quarter revenue coming in at $195-$205 million vs. its prior guidance of $160-$180 million and the $170 million consensus. 

Fisker (FSR) and Wallbox  (WBX) are partnering to offer Fisker EV owners Wallbox home EV chargers for purchase through the Fisker website in the US, Canada, and European launch markets. 

Former Twitter (TWTR) CEO Jack Dorsey will be deposed Tuesday as part of the company's lawsuit against Elon Musk.

The National Retail Federation sees consumer plan to spend $10.6 billion on candy, costumes and decor for Halloween this year, including $710 million on pets. Good news for the likes of Hershey (HSY) and Party City (PRTY).


Biotech firm Jupiter Neurosciences (JUNS) is expected to start trading on September 21 and immune therapeutics developer Alopexx (ALPX) is expected to start trading on September 22. 

Shares of Porsche AG (POAHY) are set to begin trading September 29 raising up to $9.4 billion and valuing the sports car maker at as much as $78 billion. Volkswagen AG (VOW) is selling 25% of Porsche preferred shares, or about 12.5% of the entire company, to investors in the public offering. 

Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Stitch Fix (SFIXis expected to report quarterly results after equities stop trading today. As we approach the end of the quarter, readers should be on the watch for earnings pre-announcements both positive as well as negative. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar

On the Horizon

Wednesday, September 21

  • UK: CBI Industrial Trends Orders - September
  • US: Weekly MBA Mortgage Applications
  • US: Existing Home Sales – August
  • US: Weekly EIA Crude Oil Inventories 
  • US: Federal Reserve Monetary Policy Decision and FOMC Economic Projections
  • US: FOMC Press Conference

Thursday, September 22

  • Japan: Bank of Japan Interest Rate Decision
  • UK: Bank of England Monetary Policy Meeting
  • Eurozone: Consumer Confidence - September
  • US: Weekly Initial & Continuing Jobless Claims, Weekly EIA Natural Gas Inventories

Friday, September 23

  • Eurozone: S&P Global Flash Manufacturing & Services PMIs - September
  • US: S&P Global Flash Manufacturing & Services PMIs – September

Thought for the Day

“The great challenge of adulthood is holding on to your idealism after you lose your innocence.”  ~ Bruce Springsteen


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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