Aurelia Butler

Drugmaker Pfizer Inc (NYSE:PFE) fell 3.4% in premarket trading after its full-year sales forecast for its COVID-19 vaccine and antiviral pills fell short of Wall Street estimates, while Coty Inc was flat after it posted quarterly revenue below estimates.The main Wall Street indexes took a hit on Monday after Facebook-owner Meta Platforms fell 5% after a historic plunge last week on bleak forecast. Its shares were down another 1.7% in premarket trading after billionaire investor Peter Thiel decided to step down from the company’s board.Meanwhile, Nvidia (NASDAQ:NVDA) Corp slipped 1.6% after SoftBank Group Corp shelved its blockbuster sale of Arm Ltd to the chipmaker in a deal valued at up to $80 billion, citing regulatory hurdles.At 07:01 a.m. ET, Dow e-minis were down 1 point, S&P 500 e-minis were down 6.5 points, or 0.15%, and Nasdaq 100 e-minis were down 35.5 points, or 0.24%.U.S. stocks have had a rough start to the year, with concerns around a more aggressive policy tightening by the U.S. Federal Reserve, geopolitical tensions in Ukraine and a mixed bag of results from Big Tech names weighing on the major indexes. All eyes are on the U.S. consumer prices data, set to be released on Thursday, after stunningly strong U.S. labor data last week put extra focus on inflation. The numbers are forecast at a four-decade high 7.3%. Of the 281 companies in the S&P 500 that reported earnings as of Monday, 78.3% beat analysts’ profit expectations, compared with an average of 84% over the past four quarters, according to Refinitiv data.Among other stocks, Peloton Interactive (NASDAQ:PTON) Inc declined 7.2% after saying it would replace its chief executive officer, cut jobs and appoint new board members as the company wrestles with waning demand for its at-home fitness equipment.General Motors Co (NYSE:GM) fell 4.8% after Morgan Stanley (NYSE:MS) downgraded the automaker’s stock to “equal-weight” from “overweight”. More

LONDON (Reuters) – The surprise split vote behind the Bank of England’s interest rate hike last week, which was too small for almost half its officials, threatens to obscure the British central bank’s intentions and potentially hurt the economy.Some BoE watchers say emerging evidence of division among policymakers over how to respond to inflation could sow confusion about its reaction function – the way investors and the public can expect a central bank to respond to economic developments. The BoE has already been accused of mixed messaging after wrong-footing investors who expected a rate hike in November, then raising borrowing costs in December. “The on-and-off-again November interest rate hike was only a microcosm of that,” said economists Robert Wood and Kamal Sharma from BofA Global Research. “What we see as changes to reaction function leave us more concerned about the current inflation episode.” With the BoE warning that inflation could soon surpass 7% – almost four times its target – four of the nine Monetary Policy Committee (MPC) members voted on Feb. 2 to raise Bank Rate to 0.75%.That would have represented the biggest one-off increase in borrowing costs since the BoE became operationally independent 25 years ago.In the end, a slim majority of five, including Governor Andrew Bailey, voted for a 0.25 percentage point increase to 0.5% – still historically very low. While the MPC agreed that further modest tightening of monetary policy was likely in the coming months, the difference between the two camps was about more than a few basis points. Minutes from their meeting showed they had different approaches to bringing inflation back towards the BoE’s 2% target.Policymakers backing a 25 basis point increase worried that a bigger rise might provoke an “outsized” shift in Bank Rate expectations among investors, which already looked steep enough to push inflation well below target in three years’ time.From this group, Chief Economist Huw Pill said on Friday he was keen to avoid the impression the BoE was going “foot to the floor” in a rapid and steep cycle of policy tightening that risked hurting the economy unnecessarily.The minority of four MPC members who wanted a bigger rate hike thought the BoE should aim to jolt expectations about higher inflation and cut out the risk that price pressures get embedded in pay deals and expectations for future inflation.The BoE could probably squash inflation by raising Bank Rate a couple more times to 1% in May and running down its nearly 900 billion pound ($1.2 trillion) bond-buying programme, alongside “consistent, forceful communication”, Wood and Sharma said. But they warned that any lack of a clear message risked creating an economic downturn that could possibly have been avoided.While the U.S. Federal Reserve looks set to raise rates in March, there seems less chance of similar differences emerging among its officials about how to tighten policy.Even St. Louis Fed President James Bullard, a strident supporter of early and fast policy tightening, told Reuters last week it was not clear what starting off with a bigger, 50 basis point, hike would accomplish.NO CLEAR MESSAGE?While the BoE has sometimes faced accusations of groupthink during normal times, in past periods of economic upheaval its policymakers mostly stuck to the same script, helping businesses and households to plan ahead, Wood and Sharma noted.Its current approach differs from the forward guidance policy of former governor Mark Carney, who tried to issue clear statements about the reaction function – although he too faced criticism that this made the BoE a hostage to fortune.Most BoE officials did not speak publicly before last week’s rates announcement and after the communication missteps of last year Bailey said he could imagine going back to the days of no guidance.But some economists warn that without a consistent message at a critical juncture for expectations about the economic and policy outlook, the BoE risks losing control of the narrative, with real world consequences.The market reaction to Thursday’s decision may have been a taster of that scenario.Investors ratcheted up their bets for future interest rate hikes, despite the signal from the BoE’s inflation forecasts that it thought the market view of the rates outlook was already aggressive.If the market goes too far in pricing rate hikes, and for too long, it would tighten financial conditions and hurt the ability of businesses and households to access finance.”We think markets are currently pricing in too many hikes; something that could persist until the BoE clarifies its approach,” said Vivek Paul, UK chief investment strategist at the BlackRock (NYSE:BLK) Investment Institute.”The MPC will need to communicate clearly what its motivation is, in our view, to avoid over-tightening financial conditions and hurting the real economy.” More

Investing.com — Bond markets remain under pressure ahead of a test of strength in the shape of three big Treasury auctions this week. The first of those takes place later Tuesday. Peloton (NASDAQ:PTON)’s CEO John Foley steps down and says the company is open to anything that will repair the 80% drop in its stock price. Pfizer (NYSE:PFE) reports earnings with the end of the pandemic seemingly coming over the horizon, while jaw-jaw in Moscow and Washington seems to have made some progress in stopping war-war in Ukraine. Oil prices retreated from overbought level as tension was ratcheted down a notch. Here’s what you need to know in financial markets on Tuesday, 8th February.1. Bonds yields push higher ahead of Treasury auctionsU.S. bond yields pushed higher ahead of a series of auctions that will show whether the market thinks it has now priced in all the monetary tightening that it needs to.A three-year note auction by the Treasury later will be followed by sales of 10-year notes on Wednesday and 30-year bonds on Thursday, with all three maturities currently trading at or near their highest in over two years.In Europe, however, the market has consolidated after ECB President Christine Lagarde told the European Parliament that any tightening of its policy would be ‘gradual’ and ‘data-dependent’.The data calendar holds few terrors for either market Thursday, with U.S. trade figures for January due at 8:30 AM ET and surveys from the NFIB and Redbook Research also out. In Europe, the Polish Central Bank is expected to raise its key rate again, by 50 basis points to 2.75%.2. Peloton switches CEO, announces big job cuts Peloton stock fell in premarket after the company said its CEO John Foley will step down and be replaced by former Netflix (NASDAQ:NFLX) and Spotify (NYSE:SPOT) executive Barry McCarthy.The maker of connected fitness machines has seen its stock drop by more than 80% from its peak as pandemic-driven behaviors have started to revert back to normal.The company also said it will cut 2,800 jobs – around 20% of total corporate headcount – and announced the appointment of other new directors. It gave no detail on rumors about possible bid interest from the likes of Amazon (NASDAQ:AMZN) or Nike (NYSE:NKE), but Foley – who together with other company insiders still controls around 80% of Peloton’s voting stock – told The Wall Street Journal that “we are open to exploring any opportunity that could create value for Peloton shareholders.” Peloton reports its quarterly earnings after the closing bell later.3. Stocks set to open mixed; Pfizer earnings due; Chip deal finally scrapped U.S. stock markets are set to open flat later, with little appetite for big new moves ahead of the Treasury auctions and, even more importantly, the January consumer inflation data due on Thursday.By 6:15 AM ET, Dow Jones futures were up 11 points, less than 0.1%, while S&P 500 futures and NASDAQ 100 futures were down by less than 0.15.Stocks likely to be in focus later include Meta Platforms (NASDAQ:FB), which slid another 5% on Monday as long-time backer Peter Thiel prepared to resign from its board, reportedly in order to focus on helping Republican candidates at the mid-term elections in November.Also in focus will be Nvidia (NASDAQ:NVDA), which finally took the long-awaited step of cancelling its planned purchase of chip designer ARM from Softbank (OTC:SFTBY), paying the Japanese company $1.25 billion for its pains.Pfizer leads the day’s earnings roster, along with Chipotle Mexican Grill (NYSE:CMG)  and DuPont (NYSE:DD). Videogames publisher Take Two Interactive, meanwhile, is indicated lower after giving a disappointing outlook late on Monday. 4. Signs of detente in Russia-Ukraine crisis help European energy pricesEuropean gas prices continued to ease gradually and the Russian rouble rose to its highest in four weeks amid further signs that diplomacy will prevent a Russian invasion of Ukraine.Russian President Vladimir Putin hinted that lengthy talks with his French counterpart Emmanuel Macron had made tentative progress, saying that some of Macron’s proposals “could form the basis of further joint steps.” French officials quoted by the BBC said that Russia had made a commitment not to take any new military initiatives, in order to allow a de-escalation. However, the Kremlin disputed that interpretation.U.S. President Joe Biden said on Monday that the U.S. will close down the Nord Stream 2 gas pipeline if Russia invades. German Chancellor Olaf Scholz, standing next to Biden, couldn’t bring himself to mention the controversial project but said Germany would side with the U.S. in such a case.Other stresses on Europe’s energy supplies remain, however: French power giant Electricite de France, which has already revised down its output forecast for this year, was forced to halt output at three further nuclear reactors due to unscheduled maintenance, AFP reported.5. Oil corrects after bull run; API, STEO eyedCrude oil prices slipped below $90 a barrel as signs of a de-escalation in the Russia-Ukraine situation increased. By 6:30 AM ET, U.S. crude futures were down 1.8% at $89.67 a barrel, while Brent crude futures kept their $90 handle at $90.81, despite a 2% drop.The American Petroleum Institute will report its weekly inventory data at 4:30 PM ET as usual, while the U.S. will also publish its regular Short-Term Energy Outlook.Meanwhile in Vienna, talks on lifting the U.S. sanctions on Iran in return for better behavior on its nuclear program have made little progress. More