5 things to know before the stock market opens Wednesday – CNBC
Tech stocks on display at the Nasdaq.
Peter Kramer | CNBC
Here are the most important news items that investors need to start their trading day:
1. The Nasdaq is warming up
There are still plenty of data dumps and reports ahead that could put the chill on stocks. But for now, U.S. equities markets are doing just fine in the early days of 2023. The Nasdaq, especially, is generating some heat, posting three winning sessions in a row. The tech-heavy index is coming off a bad 2022, falling much more than the broader S&P 500 and the blue-chip Dow, as rising interest rates spoiled many investors’ appetites for risk. Still, rates aren’t coming down any time soon, and the Federal Reserve is indeed expected to hike them further, so this rally may not have legs. Read live markets updates here.
2. Wells Fargo scales back mortgage biz
People walk past a Wells Fargo branch on January 10, 2023 in New York City.
Leonardo Munoz | View Press | Corbis News | Getty Images
Wells Fargo was the nation’s top mortgage lender as of 2019. Now, as the big bank faces tighter regulatory scrutiny and higher interest rates, it’s taking a huge step back from the housing market. This will put it more in line with rivals such as JPMorgan Chase and Bank of America, which reduced their share of the mortgage market following the 2008 financial crisis. “We are acutely aware of Wells Fargo’s history since 2016 and the work we need to do to restore public confidence,” Wells Fargo consumer lending chief Kleber Santos told CNBC’s Hugh Son. “As part of that review, we determined that our home-lending business was too large, both in terms of overall size and its scope.”
3. Powell shakes off political pressure
The Federal Reserve is hearing it from all sides as its policymakers attempt to tame inflation by raising interest rates. The central bank’s critics said it took too long to address the issue, as prices surged at the hottest clip in four decades. Now they’re saying the Fed is doing too much to fix it, potentially putting the economy at risk of a recession. This is why, Chairman Jerome Powell said, it’s a good thing that the Fed is politically independent. “The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors,” he said …….