Market Morning: Fed Speaks, FedEx Falls, Starbucks Stars, Bayer In Trouble

Market Morning: Fed Speaks, FedEx Falls, Starbucks Stars, Bayer In Trouble

Fed Speaks Today on Balance Sheet, Rate Hike Projections

There are no expectations for the Fed to raise interest rates at the post FOMC meeting press conference today at 2:00pm, but traders will be looking for indications on when the balance sheet reduction program will end and how many rate hikes the Federal Reserve expects in 2018, which is probably zero at this point. The chances judging by federal funds futures are 75% that no rate hikes will occur in 2018. Some analysts are looking for a projected end to the shrinking of the Fed’s balance sheet by the end of the year, around October, which would put the total size of the balance sheet at about $3.75 trillion, still about $3 trillion more than it was prior to the last financial crisis. The exact wording of the press release could have significant effects on commodity markets, particularly gold (NYSEARCA:GLD), which has been looking for direction since the beginning of March.

SEE: Cannabis Stock News Daily Roundup March 19

Alphabet, Nvidia, Present Two Gaming Streaming Services

Alphabet Inc.’s (NASDAQ:GOOGL) Google presented a new gaming service called Stadia, allowing gamers to access games without a gaming console. Nvidia (NASDAQ:NVDA) streaming service GeForce Now was featured at a different presentation, which has been in beta for two years and has 300,000 subscribers. Nvidia CEO Jensen Huang wasn’t all that enthusiastic about a “Netflix of Gaming” model “because we don’t have a discovery problem for gaming,” explaining that the videogame industry is typically dominated by about five to 10 games at a time. While Google is trying to become the publisher, Huang said that wouldn’t work. “Leave the economics completely to the publishers, do not get in the way of their relationship with the gamer.” So Nvidia is betting on the old model while trying the new, and Google is all in on streaming.

FedEx Falls on Slow Shipping

Sign of a slowing economy? Perhaps. FedEx (NYSE:FDX) missed on earnings last week, earning $3.03 a share, below estimates of $3.10, with a top line of $17B, missing expectations of $17.7B. Guidance fell for the full year as well, with a midpoint below consensus. “Slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue,” the company said in its press release. The stock has not moved on net since 2016 and rumors are circulating that if it gets cheap enough, (NASDAQ:AMZN) may acquire the shipper and make it its own in-house Amazing shipping company.

New Rewards at Starbucks Has Coffee Drinkers Wired

Starbucks (NASDAQ:SBUX) is revamping its rewards program, perhaps to reinvigorate traffic after a change in policy that allows anyone to come in and use the bathroom at any time. Basically, for every dollar spend, a customer gets 2 stars. Just like tickets at Chuck E Cheese, stars can get you an extra espresso shot, hot coffee, a handcrafted drink, a lunch sandwich or protein box or salad, or packaged coffee with 400 stars. Any more than that and you basically own the franchise.  Membership in the Starbucks rewards program has climbed more than 25 percent over the past two years, with more than 16 million active members as of December. In total, Starbucks Rewards account for 40 percent of Starbucks’ transactions in the U.S.

Another Jury Blames Bayer’s Roundup For Cancer

A second verdict against Bayer’s (OTCMKTS:BAYRY) Roundup has come in from a second jury. The glyphosphate-based weed killer was determined to have caused cancer to a groundskeeper after years of use in a different case last year, and now the problems are stacking up for Bayer since it bought Monsanto, the maker of the weed killer. The first verdict awarded the plaintiff $289M, though this latest verdict did not include a liability number, which will come later. There are 11,200 lawsuits against Bayer on the Roundup issue, and Bayer says that they will challenge the verdict because the jurors were focused on side-evidence of corporate misconduct rather than the basic scientific question of whether Roundup causes cancer, which jurors are not really experts in. The same judge is overseeing 760 Roundup cases, and the next one is set to start by the end of the month.