Bonds & Stocks
Stocks kept to small ranges ahead of a slew of company results that should offer insights on the state of the global economy. The S&P 500 edged higher while the Nasdaq 100 was little changed after positive earnings reports from United Airlines Holdings Inc., Verizon Communications Inc. and Johnson & Johnson. Equities have broadly shrugged off the Federal Reserve’s warnings that interest-rate cuts are some way off. Instead they have cheered the economy’s resilience even after the most aggressive policy-tightening cycle in decades.
Economy
US regulators are preparing to introduce a plan to require that banks tap the Federal Reserve’s discount window at least once a year to reduce the stigma and ensure lenders are ready for troubled times. The proposal, which is being drafted behind closed doors by the Office of the Comptroller of the Currency, Fed and Federal Deposit Insurance Corp., is the latest response to last year’s regional-bank crisis. The turmoil spotlighted that several lenders weren’t even set up operationally to quickly borrow from the window in a pinch.
World
China’s boldest plan yet to stem the current stock market rout is facing a wall of skepticism as disillusioned investors say any rebound will prove fleeting without a fundamental fix for its ailing economy. A rare mix of positive news including a stabilization fund in the works and Premier Li Qiang’s order to calm markets sent equity benchmarks rallying on Tuesday. However, China’s history of botched market rescue efforts, the grim state of its economy, and uncertainties over Beijing’s long-term policy roadmap are keeping investors skeptical about the sustainability of these gains.