Fed’s Bowman to speak, Boeing’s new payment offer

Investing.com — U.S. stock futures edged higher as traders weighed recent comments from Federal Reserve policymakers about last week’s significant interest rate cut. Investors will be watching statements from Fed Governor Michelle Bowman, who was the only official to vote against the big rate cut. Elsewhere, Boeing (NYSE: ) is presenting what it describes as its “best and final” pay offer for striking workers.

1. Futures rise

U.S. stock futures pointed higher on Tuesday after Fed officials’ comments on a jumbo interest rate cut sent Wall Street stocks higher in the previous session.

By 03:22 ET (0722 GMT), the contract had added 37 points, or 0.1 percent, was up 8 points, or 0.1 percent, and gained 47 points, or 0.2 percent.

The 30-stock, benchmark and tech-heavy stocks all gained on Monday as investors weighed statements in support of the Fed’s huge 50-basis-point rate cut last week. Fed officials, including Neel Kashkari, Raphael Bostic and Austan Goolsbee, supported the move and called for further cuts in borrowing costs this year.

Meanwhile, new data showed US business activity held steady in September and average prices for goods and services rose at the fastest pace in half a year. The numbers, along with the release of the latest price index for personal consumption expenditures (PCE) — one of the Fed’s preferred inflation gauges, could provide an updated look at the state of price growth in the world’s largest economy.

Traders are now betting there’s about a 53 percent chance the Fed will cut rates again by half a point at its next meeting in November, according to CME Group’s (NASDAQ: ) closely watched FedWatch tool.

2. Fed Bowman to speak

Markets are likely to follow Tuesday’s comments from Fed Governor — and the only dissenter on the size of last week’s rate cut — Michelle Bowman.

Bowman is scheduled to speak at 9 a.m. ET at the annual Kentucky Bankers Association Convention, according to the Fed.

The statements will come after Bowman said last week that he favored a quarter-point cut because of fears that a larger cut would be misinterpreted by the public as a sign that the Fed’s long-running fight against inflation had been won .

In particular, she noted that so-called “core” PCE, which excludes volatile items such as food and fuel, is currently above the central bank’s preferred target of 2 percent.

“We have not yet reached our inflation target,” Bowman said on Friday, adding that a more measured rate cut would “avoid unnecessary stimulus to demand.”

3. Boeing makes an improved wage offer to striking workers

Boeing has offered a sweetened labor deal to more than 30,000 striking workers in the US Pacific Northwest, although their union said it would not put the proposal to a vote.

The aerospace giant’s latest offer includes a 30 percent across-the-board pay increase over four years, as well as improved retirement benefits and an increased ratification bonus if workers accept the proposal by Friday. Boeing said it was its “best and final” offer.

However, the International Association of Machinists and Aeronautical Workers District 751, which represents the workers, rejected the approach, saying it was “thrown at us” by Boeing without prior negotiations. Meanwhile, the company said it presented the offer to the union and then to employees.

Finding a resolution to the strike, which began after workers rejected an earlier compensation package earlier this month, has become critical for Boeing. Analysts have signaled that a prolonged work stoppage could put a further strain on the firm’s finances at a time when it is already facing production delays and increased scrutiny of its safety situation.

4. Chinese stocks rise on stimulus

China’s Shanghai Shenzhen CSI 300 index rose more than 4 percent on Tuesday, while Hong Kong also rose on fresh stimulus measures from Beijing.

Chinese officials unveiled a series of measures planned to further boost economic growth, with the People’s Bank of China (PBOC) set to cut reserve requirements for banks by 50 basis points to unlock more liquidity.

For the struggling housing market, the government said it would cut mortgage rates on existing loans. Bloomberg reported that the government plans at least 500 billion yuan ($70.8 billion) of liquidity support for local stocks.

The moves come after the PBOC cut the short-term repo rate on Monday in a bid to boost liquidity further. Chinese officials are scrambling to shore up growth as the world’s second-largest economy grapples with lingering disinflation and a widening slump in the housing market.

5. Raw materials

Crude oil prices rose on Tuesday, boosted by monetary stimulus from top importer China as well as escalating tensions in the Middle East.

By 03:23 ET, the contract was up 1.2% at $74.08 a barrel, while futures (WTI) traded 1.4% higher at $71.34 a barrel .

China’s sweeping stimulus measures boosted hopes of expanding crude oil demand from the world’s biggest importer.

Elsewhere, Israel’s military said it had launched airstrikes against Hezbollah sites in Lebanon on Monday, raising concerns about a supply disruption from the oil-rich region, tightening global markets.