Know 5 things before opening the stock market on Thursday

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Traders on the floor of the NYSE, September 14, 2022.

Source: NYSE

Here are the most important news items for investors to start their trading day:

1. Next morning

Investors were seeking long-term clarity from the Federal Reserve on Wednesday, but they didn’t like it when the central bank did it. While raising its benchmark rate by another three-quarters of a point, the Fed said it would continue to do so until it hits 4.6%. Now, the federal funds rate is 3% to 3.25%, the highest it has been in a little over 14 years. The announcement triggered a volatile afternoon, with stocks first falling, then returning to positive territory before ending the day with big losses. On Thursday morning, all three major indices showed a set to open mixed.

2. Bond king and yield curve

DoubleLine Capital CEO Jeff Gundlach, also known as the Bond King, believes the Fed’s aggressive campaign to cool inflation is too late – and is pushing the US economy into a possible recession. “The Fed should have done more earlier,” Gundlach told CNBC’s “Closing Bell: Overtime” on Wednesday. “I think the Fed should be slow on this rate hike.” He pointed to the difference in yields between the 2-year and 10-year Treasury notes, also known as the yield curve. Some analysts and market players see higher yields on short-term debt as a sign of an impending recession. Early Thursday, the gap between yields widened, with the 2-year Treasury yield nearing 4.1%. “I think the chances of a recession in 2023 are very high. I mean, I’d put them at 75%,” Gundlach said Wednesday.

3. Salesforce’s new goals

Marc Benioff, Salesforce CEO, at WEF on May 25, 2022 in Davos, Switzerland.

Adam Galica | CNBC

Recent market woes, driven by the Fed’s push to stem inflation, haven’t been particularly kind to tech companies, forcing several of them to tighten their belts a bit. On Wednesday, cloud software company Salesforce, which owns workplace messaging app Slack, unveiled its goal of reaching an adjusted operating margin of 25% for fiscal 2026. To get there, the company said it will aim to reduce the ratio of sales and marketing expenses to revenue. Salesforce already said earlier this year that it will be more careful in how it adds to its headcount and that it is evaluating its real estate as hybrid work becomes the norm. The company’s shares hit a 52-week low on Wednesday before retreating slightly during off-hours trading.

4. Unrest in Russia

An activist takes part in an unauthorized protest on Arbat Street on September 21, 2022 in Moscow, Russia. The sign mobilized the words “No Burial.”

Contributor | Getty Images News | Getty Images

Vladimir Putin’s decision to call up 300,000 reservists for his floundering invasion of Ukraine has not gone down well with many people in Russia. More than 1,300 people were arrested in various cities after protests broke out following the Russian president’s announcement. Flight prices out of Russia have also risen and social media was full of images of people queuing at border crossings. Putin’s latest move comes as other world leaders meet at the United Nations General Session in New York. Western officials, including US President Joe Biden, condemned Putin’s threats. In a virtual address to the United Nations, Ukrainian President Volodymyr Zelensky called for a special tribunal that would punish Putin’s government. “Russia will pay for this war,” Zelensky said.

5. More problems for Trump

New York Attorney General Letitia James speaks during a press conference regarding the financial fraud case against former U.S. President Donald Trump and his family in New York, Sept. 21, 2022.

Yuki Iwamura | AFP | Getty Images

Wednesday didn’t get off to such a great start for Donald Trump, as New York Attorney General Letitia James announced that she would be suing the former president, his three grown children and his company for nearly $250 million in damages. He said his civil investigation uncovered “staggering” fraud and he sent a criminal referral to federal investigators. The day ended on an arguably bad note for Trump, as an appeals court panel — which included two judges he appointed and one appointed by former President Barack Obama — unanimously decided to allow federal investigators to resume their review of highly sensitive documents seized from Mar- Apply to a criminal investigation.

– CNBC’s Sarah Min, Yun Li, Sophie Kidderlin, Jordan Novett, Sam Meredith, Amanda Macias, Kevin Bruninger and Dan Mangan contributed to this report.

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