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The Federal Reserve’s baseline is for two more quarter-point cuts over the remainder of the year is a “very good base case” but the economy rarely follows that path, New York Fed President John Williams said Tuesday.
The Fed’s economic forecast, released at the last meeting, called for two-more quarter-point cuts.
“My general view is that if you look at the median of the Summary of Economic Projections that was put out last meeting, that is a pretty reasonable representation of the base case,” Williams said, in an interview with the Financial Times.
“There’s a lot of uncertainty in the economy out there. I personally expect that it will be appropriate again to bring interest rates down over time,” he added.
Sage Therapeutics Inc.’s stock tumbled 12.8% early Tuesday, after the company said it would cease development of a treatment for mild cognitive impairment and mild dementia in Alzheimer’s disease due to a failed trial.
Cambridge, Mass.-based Sage said a Phase 2 trial of dalzanemdor did not demonstrate statistically significant difference from baseline vs. placebo measured using the Wechsler Adult Intelligence Scale Fourth Edition Coding Test score at Day 84, the primary outcome measure of the study.
Sage said it would still report topline data from a separate study of dalzanemdor in people with cognitive impairment associated with Huntington’s disease later this year.
PepsiCo Inc.’s stock fell 1.1% premarket Tuesday, after the drinks and snacks company’s fiscal third-quarter revenue fell short of estimates and it lowered full-year guidance.
“Our businesses remained resilient in the third quarter, despite subdued category performance trends in North America, the continued impacts related to certain recalls at Quaker Foods North America and business disruptions due to rising geopolitical tensions in certain international markets,” CEO Ramon Laguarta said in prepared remarks.
The company is planning to invest in commercial activities for the balance of the year in an effort to stimulate consumer demand, while retaining a focus on cost discipline given the subdued growth environment, he added.
China has imposed fresh tariffs on brandy imported from the European Union, just days after the bloc voted to place its own tariffs on Chinese electric vehicles.
In a statement on Tuesday, China’s Ministry of Commerce said it had decided to impose temporary tariffs on brandy from the EU of 30.6% to 39%, which will come into effect on Oct. 11.
China’s new tariffs will primarily hit French brandy producers including the world’s top four cognac producers Hennessy, Martell, Courvoisier, and Remy Martin, in what caused drops in LVMH, Remy Cointreau, Pernod Ricard, and Campari Group’s shares prices.
The Ministry of Commerce said it planned to impose 39% tariffs on Hennessy, 38.1% tariffs on Remy Martin, 30.6% tariffs on Martell and 34.8% tariffs on Courvosier. All other EU brandy producers are set to be hit with tariffs of 34.8%.
News of China’s tariffs contributed to a wider slip in European luxury stocks as the China rally suffered a setback on investors disappointment around a lack of fresh stimulus measures. Kering shares fell 6% on Tuesday as Burberry shares slipped 6% and Hermes stock fell 2%.
After early losses, U.S. stock futures started to turn higher.
All three major contracts were in positive territory, with the S&P 500 contract recently up 0.4%.
Crude oil futures fell by about 2%.
How are stock-index futures trading:
S&P 500 futures increased 1.75 points, or 0.03%
Dow Jones Industrial Average futures fell 9 points, or 0.02%
Nasdaq 100 futures fell 5.5 points, or 0.03%
On Monday, the Dow Jones Industrial Average fell 398.51 points, or 0.94%, to 41,954.2 as the S&P 500 fell 55.13, or 0.96%, to 5,695.94, and the Nasdaq 100 fell 234.28 points, or 1.17%, to 19,800.74.
Stock futures slipped on Monday as a lack of clarity from China on the far-reaching stimulus package announced by the People’s Bank of China two weeks ago led to sharp drops in the Shanghai composite and Hang Seng indexes.
Speaking at a press conference on Tuesday morning, Zheng Shanjie, the head of China’s National Development and Reform Commission (NDRC), failed to provide more details on the size and shape of China’s stimulus package.
Excited investors were underwhelmed by Zheng’s speech amid expectations the head of China’s economic planning body would offer clarity on the Chinese Communist Party’s plans to reinvigorate the world’s second largest economy.
Monday saw the S&P 500 post its sharpest drop in over a month as all sectors posted declines apart from energy, which was boosted by a recent increase in oil prices driven by mounting tensions in the Middle East.
The Magnificent Seven led the decline as Alphabet stock fell 2.44% after a U.S. judge ruled the Google owner must open up its Play Store to greater competition from rival developers.
On Tuesday, investors will be looking ahead to the release of the National Federation of Independent Business’ small business optimism index for September and the trade balance for August, with key data later in the week.
PepsiCo results are due as third-quarter earnings season kicks off.
