Stocks have exploded to session highs after the latest Fed minutes showed that Fed Officials are worried about a global growth slowdown and a strengthening US dollar.
After the release of the Minutes, the Dow was up as much as 220 points, the S&P 500 was up 26 points, and the Nasdaq was up 64 points.
The latest Minutes showed the Fed taking a generally dovish stance to its policy, as the Fed is worried about a global slowdown and about its forward guidance, which some Fed Officials said they would like to see become data dependent.
Also on Wednesday, shares of Sears were down as much as 15% after a report from Bloomberg said the company’s vendors could be facing pressure from insurance companies.
Aluminium giant Alcoa is set to report earnings after the market close on Wednesday, marking the unofficial start of third quarter earnings season.
Analysts have slashed their expectations for third quarter earnings to 4.6% from 9% at June 30, and of companies issuing guidance, 82 have reported negative guidance with 27 reporting positive guidance.
In a note to clients ahead of earnings, Morgan Stanley’s Adam Parker wrote that he expects companies to clear a lowered bar, writing that, “Our confidence is bolstered that earnings season will be fine as we made it through the first six days of October without any negative pre-releases. For these companies, the market is rewarding companies that beat consensus earnings and revenue estimates and is punishing misses.”
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