Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street looks steady after two days of Fed-driven selling
- Key Treasury yield spread remains inverted after jobless claims data
- Warren Buffett's Berkshire Hathaway reveals major stake in HP
- Shell announces write-off up to $5 billion in assets after exiting Russia
- Ukraine ask NATO for more weapons as Russia regroups for eastern offensive
1. Wall Street looks steady after two days of Fed-driven selling
U.S. stock futures were relatively steady Thursday, as Wall Street tried to avoid a three-session losing streak. The Nasdaq led the selling over the past two days as the Federal Reserve started to strike a more hawkish tone — sinking 2.2% on Wednesday, a day after about a 2.3% drop.
- After a number of Fed officials called for more aggressive tightening to fight inflation, the central bank's minutes from its March meeting indicated general agreement to shrink its massive balance sheet by $95 billion per month.
- The minutes also showed Fed officials were considering larger-than-usual rate hikes of 50 basis points after a 25 basis point raise last month, the first increase in more than three years.
2. Key Treasury yield spread remains inverted after jobless claims data
Bond yields rose Thursday after the government reported fewer-than-expected 166,000 weekly initial jobless claims. The 10-year Treasury yield was trading around three-year highs above 2.6% and was no longer inverted lower than the 2-year yield. However, the 5-year Treasury yield remained inverted, still higher than the 30-year yield.
Historically, these inversions have happened before economic recessions. With the jobs market strong, the Fed may have room to slow the economy to fight inflation — threading the needle on its dual mandate of fostering maximum employment and controlling prices. The central bank is expected to hike rates at all six of its remaining meetings this year. The size of those increases are the real question.
3. Warren Buffett's Berkshire Hathaway reveals major stake in HP
Warren Buffett's Berkshire Hathaway has initiated a major stake in tech hardware stock HP Inc., becoming the largest shareholder in the PC and printer maker. Berkshire purchased nearly 121 million shares of HP, roughly 11%, according to securities filings, a stake that was worth roughly $4.2 billion based HP's closing stock price Wednesday. That's before a 15% jump in HP shares in Thursday's premarket following the news, which broke hours after the closing bell. Berkshire has become more active in recent months, announcing a deal to buy insurance company Alleghany for $11.6 billion and scooping up shares of energy company Occidental Petroleum.
4. Shell announces write-off up to $5 billion in assets after exiting Russia
Shell said Thursday it will write off between $4 billion and $5 billion after pulling out of Russia. The announcement offers a first glimpse at the potential financial impact to Western oil giants that exited Russia following Moscow's unprovoked invasion of Ukraine. Further details of the impact of ongoing developments in Ukraine will come in Shell's first-quarter earnings report on May 5, the company said. Shell previously estimated that Russia write-downs would reach $3.4 billion. Last month, Shell was forced to apologize for buying heavily discounted Russian oil and subsequently announced a withdrawal from Russia.
5. Ukraine ask NATO for more weapons as Russia regroups for eastern offensive
Ukraine on Thursday appealed to NATO for more weapons in its fight against Russia to help prevent further atrocities like those reported in Bucha, just outside of Kyiv. Western countries have provided Ukraine with portable anti-tank and anti-aircraft weapons, but they have been reluctant to supply aircraft, tanks or any other equipment that would require training to use.
- Russian forces, which failed to quickly take Ukraine's capital, are regrouping for an offensive in eastern Ukraine, where Moscow early in its incursion recognized the Luhansk and Donetsk areas as independent states.