Private payrolls, Trump tweets — What you need to know in markets on Wednesday

Markets Reporter
Yahoo Finance

It is clearly Amazon’s market now.

And investors care a lot about what President Donald Trump thinks of the e-commerce giant. Trump’s most recent series of tweets attacking Amazon (AMZN) moved into a second day on Tuesday.

On Tuesday morning, Trump tweeted that, “I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy.” This was the second-straight day and the third time in four mornings he expressed his view that Amazon is ripping off the USPS.

But a Bloomberg report published late in afternoon trading which softened the White House’s ambitions on regulating Amazon sent shares of the company and the broader market higher.

Bloomberg’s Jennifer Jacobs and Spencer Soper reported that there are “no active discussions” happening inside the White House about regulating Amazon. This news sent Amazon shares, which had been trading lower, up as much as 2.3% and also sent the broader market higher.

President Donald Trump speaks during a news conference with Latvian President Raimonds Vejonis, Estonian President Kersti Kaljulaid, and Lithuanian President Dalia Grybauskaite in the East Room of the White House, Tuesday, April 3, 2018, in Washington. (AP Photo/Andrew Harnik)
President Donald Trump speaks during a news conference with Latvian President Raimonds Vejonis, Estonian President Kersti Kaljulaid, and Lithuanian President Dalia Grybauskaite in the East Room of the White House, Tuesday, April 3, 2018, in Washington. (AP Photo/Andrew Harnik)

In the end, the Dow gained 389 points, or 1.6% to lead the major averages, while the S&P 500 added 32 points, or 1.3%, and the tech-heavy Nasdaq gained 71 points, or 1%.

As we wrote last week, Amazon is part of the bidding process for what could be a multi-billion dollar cloud services contract with the Pentagon, opening the door for Trump to still find ways to hurt the company and its CEO Jeff Bezos.

We’ll see if Trump uses Wednesday morning as another opportunity to go after Amazon.

Elsewhere in markets on Wednesday, investors will be keeping an eye on shares of Spotify (SPOT), which began trading on the New York Stock Exchange at around 12:40 p.m. ET on Tuesday at $165.90 per share. The stock sold off steadily through the afternoon and closed at $149.01 per share.

On the economics calendar on Wednesday, investors will get the first of three days of labor market news, with ADP’s private payrolls report for March expected to show that 210,000 jobs were created in the private sector during the month. Also on the economic calendar will be readings on service-sector activity and factory orders.

And on the earnings side, notable results expected out Wednesday should include homebuilder Lennar (LEN), retailer Acuity Brands (AYI), and Carmax (KMX).

John Williams to the New York Fed

The New York Federal Reserve has a new president.

On Tuesday, the Fed regional bank announced that John Williams, currently the president of the San Francisco Fed, will be the bank’s next president, taking over from retiring New York Fed president Bill Dudley in June.

This move is significant for a number of reasons, some having to do with policy and others, politics.

On the policy side, Williams will now be a permanent voting member of the Federal Open Market Committee (FOMC), which is the Fed committee that votes on monetary policy. Williams’ first vote as New York Fed president will be at at the July 31-August 1 policy meeting.

President and Chief Executive Officer of the U.S. Federal Reserve Bank of San Francisco, John Williams, addresses a news conference in Zurich, Switzerland, September 22, 2017. REUTERS/Arnd Wiegmann/File Photo
President and Chief Executive Officer of the U.S. Federal Reserve Bank of San Francisco, John Williams, addresses a news conference in Zurich, Switzerland, September 22, 2017. REUTERS/Arnd Wiegmann/File Photo

“Williams has been a centrist on the committee in recent years, supporting all the major decisions taken by the FOMC, including those to end asset purchases, begin rate hikes and, the shrinking the balance sheet,” said Michael Gapen, an economist at Barclays. Gapen added that Williams is a “pragmatist.”

Additionally, Williams is a Ph.D economist — unlike current Fed Chair Jerome Powell — and given that both men started at the Fed in 2012, Gapen said the familiarity between the two and their differing backgrounds was likely a positive factor in the selection.

But Williams’ appointment comes after calls from lawmakers including Sen. Cory Booker (D-NJ), who said in an op-ed published last month that, “The New York Fed has never had a woman or a person of color at its helm, and the Federal Reserve Bank only just last year added its first black regional bank president… In making their decision, the members of New York Fed Board of Directors should seek the input of Americans in different parts of the country, in rural and urban areas, where they can hear from communities about their needs.”

Booker noted that each New York Fed president during its history had worked at a bank either immediately before or after their tenure. On this count, Williams is an outside choice. But amid calls for increasing gender and ethnic diversity in the Federal Reserve system, Williams’ appointment will disappoint.

Additionally, Williams has no experience in financial markets and was the president of the regional Federal Reserve bank in which Wells Fargo (WFC) is based during its fake accounts scandal.

In a statement published on Tuesday, former Fed Chair and San Francisco Fed president Janet Yellen made a forceful statement in support of Williams’ appointment, however, saying that, “John’s groundbreaking research helped establish the intellectual foundation for the Federal Reserve’s determination to support American households and businesses by pushing short-term interest rates very low and adopting non-traditional strategies to lower longer-term interest rates.”

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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