U.S. Treasury Secretary Janet Yellen testifies before a Senate Appropriations Financial Services and General Government Subcommittee hearing on President Biden’s proposed budget request for the Department of the Treasury for fiscal year 2024, on Capitol Hill in Washington, March 22, 2023.
Evelyn Hockstein | Reuters
Here are the most important news items that investors need to start their trading day:
1. Double whammy
The Federal Reserve decided to hike its benchmark rate by a quarter point Wednesday, as was largely expected. The Fed also eased off its rate-increase ambitions, saying one more could be in the offing for this year. Markets seemed to take it all in stride. But then Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen, who was testifying on Capitol Hill, said some things that didn’t seem to sit so well with investors. Powell, speaking to reporters after the big announcement, said a rate cut isn’t in the Fed’s “base case” and noted that the recent collapse of Silicon Valley Bank likely resulted in tightening in financial conditions. Yellen, meanwhile, told lawmakers that regulators aren’t considering a blanket guarantee for all U.S. deposits without congressional approval. The Dow, the S&P 500 and the Nasdaq all ended the day down at least 1.6%. Follow live markets updates.
2. Ford’s profit engines carry EV biz
Ford CEO Jim Farley announces at a press conference that Ford Motor Company will be partnering with the worlds largest battery company, a China-based company called Contemporary Amperex Technology, to create an electric-vehicle battery plant in Marshall, Michigan, on February 13, 2023 in Romulus, Michigan.
Bill Pugliano | Getty Images News | Getty Images
Ford is changing the way it reports financial results, which will put its nascent electric vehicle business under a bigger spotlight. The company said its EV unit lost about $2.1 billion last year on an operating basis, and that it expects to post an adjusted loss of $3 billion in 2023. But, as the Detroit automaker works to gain traction in the EV market, it plans to rely a great deal on its legacy internal combustion engine and fleet businesses, which rang up a combined $10 billion in operational profits last year. The outlook is even better for this year: Ford expects adjusted profits of $7 billion for the ICE unit and $6 billion for its fleet operations.
3. New CEO, old problems at Starbucks
CEO of Starbucks Howard Schultz back stage with soon to be Starbucks CEO Laxman Narasimhan at Starbucks Headquarters during Investor Day in Seattle, Washington Tuesday September 13, 2022.
Melina Mara | The Washington Post | Getty Images
It’s Laxman Narasimhan’s first week as Starbucks CEO and already he finds himself leading a shareholder meeting that will be brimming with hot-button issues. Among the proposals shareholders will vote on Thursday is a plan to hold an independent probe into the company’s labor practices, as baristas at nearly 200 Starbucks cafes have already voted to unionize. It comes ahead of former CEO Howard Schultz’s showdown next week with pro-union Sen. Bernie Sanders on Capitol Hill. Another big proposal involves succession planning, which is probably an awkward subject for Narasimhan, who’s only been on the job a few days. But Schultz, who built the coffee company into a global behemoth, is still around, so some shareholders want to head off a fourth go-round for the olive oil coffee mastermind and one-time possible presidential candidate.
4. Headed for trial?
Members of Rise and Resist participate in their weekly “Truth Tuesday” protest at News Corp headquarters on February 21, 2023 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Attorneys for Dominion Voting Systems and Fox Corp. have said their piece, and now they’re waiting for a Delaware judge to rule on whether the $1.6 billion case will head to trial next month. Dominion is suing Fox for defamation, as the media company’s right wing cable networks, Fox News and Fox Business, aired repeated false claims that Dominion’s voting machines were rigged against Donald Trump in the 2020 election, even though its executives and many of its hosts privately rejected them. Fox argues that it has the First Amendment on its side. The judge, Eric Davis, had pointed questions for both sides this week and didn’t appear to be willing to rule for either one. There’s been no sign of a potential settlement, either. A trial, which is slated to begin April 17, could mean big names like Fox Corp. Chairman Rupert Murdoch taking the stand.
5. The battle for eastern Ukraine
A Ukrainian tank fires at Russian positions near Kreminna, Luhansk, in January. Kreminna is one of several areas where Russian troops have “failed to make more than incremental tactical gains,” according to ISW.
Anatolii Stepanov | AFP | Getty Images
It looks like Russia’s attempts to take Bakhmut in eastern Ukraine are stalling out, according to military analysts. For a while, it looked like Kremlin forces and pro-Putin mercenaries were going to claim the area, but Ukraine’s military fought to hold the line, even as President Volodymyr Zelenskyy faced criticism over heavy losses. In neighboring Luhansk, however, Russian troops have been seen making gains amid heavy fighting, according to analysts. Follow live war updates.
– CNBC’s Tanaya Macheel, Jesse Pound, Christina Wilkie, John Rosevear, Lillian Rizzo contributed to this report.
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