Here are five things you must know for Thursday, November 3:
1. -- Stocks Futures Mixed Following Fed Taper, Rate Pledge
U.S. equity futures traded mixed Thursday, with tech stocks pushing deeper into record high territory, as global investors unpack a dovish Federal Reserve policy statement following its widely-signaled tapering decision.
The Fed's tapering decision, which will trim $15 billion from its $120 billion in monthly bond purchases, was offset by Chairman Jerome Powell's pledge to be "patient" on rate hikes while he repeated his view that 'transitory" inflation pressures will ease into next year.
The dovish assessment -- which came alongside record-high readings for services sector activity and the steepest gains in the 'prices paid' component of the ISM data since 2005, lifted Wall Street to a triple-set of record highs last night and looks to add at least some momentum heading into the trading day.
Futures contracts tied to the Dow Jones Industrial Average are indicating a modest 20 point opening decline while those linked to the S&P 500 are priced for a 4 point move to the up. Futures tied to the tech-focused Nasdaq Composite are indicating a 60 point gain from last night's record close as benchmark 10-year notes yields ease to 1.571%.
2. -- Powell's 'Patient' Stance on Rate Hikes Tested By Traders
Federal Reserve Chairman Jerome Powell provided a direct message on rate hikes to Wall Street Wednesday, pledging to be patient as he and his colleagues track job market developments and inflation prospects in what he called a "post COVID world."
That message, however, is being challenged by interest rate traders and market participants who have remained skeptical of his insistence that inflation pressures -- which have taken benchmark readings to the highest levels in decades -- are the result of supply chain and energy market shocks linked to the global pandemic.
"Ideally, we would see further development of the labor market in a context where there isn't another COVID spike," Powell told reporters yesterday in Washington. "We don't think it is time yet to raise interest rates.
However, at the the signaled pace of tapering, the Fed would exhaust it total pandemic purchase program by June of next year, with Fed Funds futures now pricing in a 90% chance of a rate hike by the following month.
3. -- FAA Boss Says 'Reset' Needed With Boeing
Boeing BA shares edged higher in pre-market trading Thursday after Federal Aviation Administration boss Steve Dickson told lawmakers his agency needed to "reset" its relationship with the world's largest planemaker.
Speaking before a Senate Commerce Committee hearing on Wednesday, Dickson said Boeing has "more work to do" with respect to its co-operation and transparency in dealing with the FAA, but noted that group has improved over the past two years following fatal crashes of its 737-Max jets in Indonesia and Ethiopia.
However, Democratic Senator Maria Cantwell from Washington told the Committee she plans to release a report on whistleblowers in the planemaking business before the end of the year.
Boeing shares were marked 0.41% higher in pre-market trading to indicate an opening bell price of $214.25 each.
4. -- Kellogg Joins Deere In Latest Union Battle on Wages, Benefits
Kellogg (K) - Get Kellogg Company Report shares slipped lower Thursday as the cereal maker became the latest American company to find itself embroiled in a major dispute with its workforce over pay and benefits.
Kellogg said union leaders rejected its revised employment contract -- which the company called its "last best final offer" -- in a move that would extend industrial action by 1,400 Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) union members at plants in Michigan, Nebraska, Pennsylvania and Tennessee.
Kellogg shares were marked 0.1% lower in pre-market trading at $63.30 each ahead of its third quarter earnings report later this morning.
5. -- Qualcom Profit Forecast Boosts Chip Sector Outlook
Qualcomm (QCOM) - Get Qualcomm Inc Report shares leapt higher in pre-market trading after the chipmaker, and key Apple (AAPL) - Get Apple Inc. Report supplier, blasted fourth quarter earnings estimates and issued a robust holiday-quarter forecast.
Qualcomm, which dominates the global market for high-end smartphone semiconductors, said current quarter revenues should rise to $10.4 billion, while overall profits for its 2022 fiscal year, which ends in September, could grow by more than 20%.
"We continue to see incredibly strong demand across all our technologies as the current environment is accelerating the scale of connectivity and processing at the edge," CEO Cristiano Amon told investors on a conference call late Wednesday. "We still expect material improvements to our supply by the end of the calendar year, and our second sourcing initiatives remain on track."
Qualcomm shares were marked 6.9% higher in pre-market trading Thursday to indicate an opening bell price of $147.95 each.