Here are five things you must know for Thursday, September 23:
1. -- Stock Futures Gain As Fed Punts On Tapering, Evergrande Buys Time
Wall Street stocks look set for another session of solid gains following a dovish statement on bond market tapering from the Federal Reserve and cautious optimism that a workable solution can be found for indebted property giant China Evergrande.
The Fed made no changes to its record low lending rate, and said it would continue buying $120 billion a month in government, corporate and agency bonds as part of a program it launched during the peak of last year's pandemic.
Fed Chair Powell, however, said conditions were nearly there, in terms of inflation and job gains, to allow a tapering of those purchases later in the year -- likely starting in November -- that would ultimately lead to a rate hike in the fall of 2022.
Overnight in Asia, China Evergrande shares soared more than 30% in Hong Kong trading as investors got their first crack at the shares following its pledge to repay yuan-based creditors earlier this week, although there has been no work on a $47.5 million payment that is due to offshore investors today.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 225 point opening bell gain while those linked to the S&P 500 are priced for a 30 move to the upside.
Nasdaq Composite futures are set for a 113 point gain as benchmark 10-year note yields edged tp 1.335%.
2. -- Fed Chair Powell Says Looks For Solid September Jobs Report
The Federal Reserve could begin tapering the pace of its $120 billion in monthly bond purchase, the first in many steps to a standard rate hike, as early as November, Chairman Jerome Powell suggested Wednesday.
During a question-and-answer session with the media following the central bank's decision to hold its key lending rate at a record low of 0%, Powell said a "reasonably strong" September jobs report, which will be published on Friday October 8, could provide the trigger.
"It wouldn't take a knockout or super-strong employment report," to begin slowing the pace of purchases, which analysts suggest could last for around 8 months before the entire program is exhausted.
Recent jobs data suggests a modest leveling off in the post pandemic recovery as Delta infections remain stubbornly high, although a rebound in August retail sales, as well as stronger-than-expected housing data, has also given the Fed enough ammunition to justify a near-term tapering schedule.
3. -- Tech, Auto Bosses Meet With White House To Discuss Chip Shortage
The White House will host a virtual meeting with some of the biggest CEOs in the tech and industrial economy Thursday as leaders continue to grapple with the impact of a global shortage in semiconductors.
Pat Gelsinger, CEO of chipmaker Intel INTC, will join key leaders from Apple AAPL, Microsoft MSFT, Micron MU, Ford F and General Motors GM in a discussion hosted by Secretary of Commerce Gina Raimondo and National Economic Council Director Brian Deese.
The Alliance for Auto Innovation asked President Joe Biden earlier this year to encourage the Commerce Department to direct cash to the sector in order to address semiconductor supply chain issues. Biden has said he wants around $37 billion in U.S. funds to kick-start domestic semiconductor production.
Last year's surge in chip demand amid the work-from-home shift triggered by the global coronavirus pandemic left global inventories depleted, triggering shortages in the face of ongoing post-pandemic demand. The February deep freeze in Texas shuttered factories run by Samsung Electronics, the world's biggest chipmaker, adding to supply-chain issues that were first triggered by a damaging fire at a Japan-based factory run by Asahi Kasei Microdevices.
4. -- Boeing Boosts Long-Term China Demand Forecast
Boeing said China, the world's second-largest economy but the largest aircraft market, would likely need 8,700 new airplanes over the next two decades, a figure that translates to overall sales of around $1.47 trillion. A further $1.8 trillion will likely be needed to service both its existing and future fleet additions over the next 20 years, Boeing said.
The first order of business for the planemaker, however, will be to convince China's aviation authority to recertify the 737 MAX, which was grounded in March of 2019 following following fatal crashes in Indonesia and Ethiopia.
Boeing shares were marked 0.9% higher in pre-market trading Thursday to indicate an opening bell price of $218.90 each.
5. -- Pfizer Gets FDA Approval For COVID Boosters
Pfizer (PFE) - Get Pfizer Inc. Report shares traded higher Thursday after the U.S. Food & Drug Administration formally approved its coronavirus vaccine for booster shots in older and at risk Americans.
The decision, which will need to be followed-up by similar approval from the Centers for Disease Control and Prevention, could pave the way for both a specific booster shot campaign in the coming weeks and a broader program during the winter months if similar permissions are granted to vaccine makers like Moderna (MRNA) - Get Moderna, Inc. Report and Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report.
“This first FDA authorization of a COVID-19 vaccine booster is a critical milestone in the ongoing fight against this disease,” said CEO Albert Bourla. "We believe boosters have an important role to play in addressing the continued threat of this disease, alongside efforts to increase global access and uptake among the unvaccinated."
Pfizer shares were marked 1.2% higher in pre-market trading Thursday to indicate an opening bell price of $44.48 each, a move that would extend the stock's year-to-date gain to around 20.8%.