Stock futures slide on Monday with the Dow on track for best month since 1976
Wheat prices rise almost 6% after Russia pulls out of grain export deal
Global wheat prices have started to rise following Russia’s withdrawal from the Black Sea grain export deal last weekend.
The most-active wheat contract on the Chicago Board of Trade jumped 5.8% to $8.77-1/2 a bushel around midnight London time, according to Reuters, after earlier hitting a high of $8.93 a bushel. Corn and soybean prices also rose.
The increases come after Russia announced Saturday that it was suspending its involvement in the Black Sea Grain Initiative that was brokered in July and which allowed vital agricultural products to be exported from several Ukrainian ports.
Russia announced Saturday that it was withdrawing from the deal for an indefinite period after it accused Ukraine of a “massive” drone attack on the Black Sea Fleet in Sevastopol in Crimea.
Ukraine has not said whether it was responsible for the attack. President Volodymyr Zelenskyy said Russia’s withdrawal from the initiative was “rather predictable” and the global food crisis would worsen.
An aerial view of Sierra Leone-flagged dry cargo ship Razoni which departed from the port of Odesa Monday, arriving at the Black Sea entrance of the Bosporus Strait, in Istanbul, Turkey, on August 3, 2022.
Anadolu Agency | Anadolu Agency | Getty Images
Moscow’s move was “an absolutely transparent intention of Russia to return the threat of large-scale famine to Africa and Asia,” Zelenskyy said, adding that “access to food has actually worsened for more than 7 million consumers.”
The UN and Turkey, which helped Ukraine and Russia to reach the grain deal, have agreed a plan with Ukraine to help move 16 vessels (12 outbound and 4 inbound) that are stuck within the maritime corridor used to export grains.
The organization overseeing grain exports, the Joint Coordination Centre, said in a statement Sunday that “in order to continue fulfilling the Initiative, it was proposed that the Turkish and United Nations delegations provide tomorrow 10 inspection teams aiming to inspect 40 outbound vessels. This inspection plan has been accepted by the delegation of Ukraine. The Russian Federation delegation has been informed.”
— Holly Ellyatt
Goldman Sachs expects Fed rates to peak at 5%
Economists at Goldman Sachs expect the Federal Reserve funds rate to peak at 5%, after raising its forecast for the central bank to hike 75 basis points in this week’s upcoming meeting.
Economists led by Jan Hatzius said in a Saturday note that they are adding another 25 basis points to their forecasts — now calling for a 50 bps hike in December, a 25 bps hike in February, and another 25 bps hike in March.
“Inflation is likely to remain uncomfortably high for a while, which could make continuing to hike in small increments the path of least resistance,” the note said.
— Jihye Lee
CNBC Pro: These 12 cheap global stocks are expected to rally — and analysts love them
Stocks around the world have sold off this year on recession fears and soaring inflation — and are now looking cheap.
Analysts say there could be buying opportunities in some stocks that they expect to rally.
To find those stocks, CNBC Pro screened for names under the MSCI World index that met a number of criteria.
— Weizhen Tan
Stock futures open flat
Futures were little changed when trading began at 6 p.m. ET on Sunday, with the Nasdaq 100 futures down just 0.1% and the S&P 500 and Dow futures closer to the flatline.
— Jesse Pound
Traders looking for sign of a slowdown from Fed
Wall Street will be watching the Federal Reserve statement closely this week for signs that the central bank will ease up on its rate hike pace.
According to the CME FedWatch tool, traders believe there is an 80% chance that the Fed hikes rates by three quarters of a point on Wednesday.
That would bring the central bank’s target range to 3.75% to 4%.
Beyond that, however, the market looks more uncertain. There is just a 44% probability of another hike of that size in December.
— Jesse Pound
Dow poised for best month since 1976
The major averages rose last week despite a rocky batch of earnings. All three are poised to break a two-month losing streak, and the Dow is set for its best month in more than 40 years.
Here’s where things stand:
- Up 5.72% last week, its fourth-straight winning week
- Up 14.40% for the month, its best month since January 1976, when it gained 14.41%
The S&P 500:
- Up 3.95% last week, its second positive week in a raw
- Up 8.8% for the month
The Nasdaq Composite:
- Up 2.24% last week, its second positive week in a row
- Up 4.98% for the month
— Jesse Pound, Christopher Hayes