STOCK MARKET NEWS: Stocks take breather, ADP job adds, oil and OPEC meeting

Venezuela's President Nicolas Maduro at the Miraflores Palace, in Caracas, Venezuela, Oct. 4, 2022. (Reuters/Leonardo Fernandez Viloria)

Chevron and other U.S. oil companies may be able to pump oil in Venezuela again if the South American country agrees to a deal, The Wall Street Journal reported.

Multiple people familiar with the negotiations told The Journal the U.S. would agree to lower sanctions if the Venezuelan government restarts talks with opposition leaders over free and fair presidential elections.

The Journal said, if successful, the agreement would only release a limited amount of petroleum into the global markets in the short term.

Tyson Chicken Nuggets for sale in Queens, N.Y., Nov. 16, 2021. (Reuters/Andrew Kelly)

Tyson Foods Inc is joining other corporate heavyweights in moving jobs out of Illinois.

The biggest U.S. meat company by sales said on Wednesday it will relocate all corporate employees from offices in Chicago and suburban Downers Grove, along with those in Dakota Dunes, South Dakota, to its headquarters in Springdale, Arkansas.

It is the latest shakeup for Tyson, which has about 1,000 corporate employees in the Chicago-area and South Dakota offices. Overall the meat company has about 120,000 U.S. employees, with about 114,000 of those working in production plants.

Tyson's decision deals another blow to Chicago's business community after hedge fund Citadel said in June it was moving its global headquarters from the city to Miami. Boeing also said this year it would move its headquarters to Arlington, Virginia, from Chicago, and Caterpillar announced plans to relocate to Texas from a Chicago suburb.

Kellogg, however, based the corporate headquarters for its largest business, snacks, in Chicago after announcing a split into three independent companies this summer.

MCDONALD’S CEO SAYS CHICAGO CRIME HURTING RECRUITMENT, SCARING EMPLOYEES AS COMPANIES FLEE: ‘CITY IN CRISIS'

Pump jacks operate at sunset in Midland, Tex., February 11, 2019. (Reuters/Nick Oxford)

POLITICS

US oil industry mocks Biden after OPEC+ announces production cuts

The U.S. Oil & Gas Association on Wednesday suggested that President Biden is now forced to turn to the U.S. oil industry after tapping out strategic reserves and OPEC+ cut production.

Nymex Crude for November delivery gained $1.24 per barrel, or 1.43% to $87.76 per barrel after OPEC+ agreed to cut output by two million barrels per day. It was the cartel’s deepest cuts to production since the 2020 COVID-19 pandemic.

In response, President Joe Biden said the U.S. would release 10 million more barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) to combat rising prices.

The move drew criticism from the U.S. Oil & Gas Association.

MARKETS

Twitter, Elon Musk's Oct. 17 trial to proceed, judge says

The filing follows Musk saying he will proceed with his original $54.20 per share offer if the Delaware Court of Chancery stays Twitter's lawsuit against him

Elon Musk is still headed for trial over his decision to walk away from his $44 billion deal to buy Twitter — even though lawyers for the billionaire sent a letter Monday stating Musk intends to “proceed to closing the transaction.”

The letter said the move was conditional upon the Delaware Chancery Court adjourning the legal proceedings.

Chancellor Kathleen McCormick said the proceeding will proceed as of now because the court had not received an legal documents asking to put the trial on hold.

Tyson food product is seen in Montpelier, Vt., on Nov. 18, 2011. (AP Photo/Toby Talbot)

A Washington cattle rancher was sentenced to 11 years in prison on charges of defrauding Tyson Foods and an unidentified company out of more than $244 million, the Justice Department said.

According to court documents, Cody Allen Easterday, 51, of Mesa, and his company, Easterday Ranches, charged the victim companies for the purported costs of purchasing and feeding 265,000 cattle that did not exist.

Easterday used some of the fraud proceeds to cover approximately $200 million in commodity futures contracts trading losses that he had incurred on behalf of Easterday Ranches.

In connection with his trading, Easterday also defrauded the CME Group, which operates the world’s largest financial derivatives exchange, by submitting falsified paperwork, which resulted in the CME exempting Easterday Ranches from otherwise-applicable position limits in live cattle futures contracts.

TECHNOLOGY

NASA, SpaceX Crew-5 mission launches to space station

NASA's SpaceX Crew-5 mission reached orbit and is heading for the International Space Station following a Wednesday launch from the Kennedy Space Center.

NASA’s SpaceX Crew-5 successfully reached orbit after blasting off at noon Eastern Wednesday. The multinational crew will serve as the agency’s fifth commercial crew rotation mission with SpaceX aboard the International Space Station.

Crew-5 will spend several months aboard the space station. While onboard, they’ll conduct new scientific research into cardiovascular health, bioprinting, and fluid behavior.

Russian Energy Minister Alexander Novak attends OPEC headquarters in Vienna, Austria, Oct. 5, 2022. (Reuters/Lisa Leutner)

POLITICS

Manchin says OPEC+ decision to cut oil production shows US must emphasize 'energy independence and security'

Sen. Joe Manchin, D-W.Va., said the U.S. needs to refocus on domestic energy security in the wake of the OPEC+ decision to cut oil production on Wednesday.

Oil rose on Wednesday, building on gains in recent days as OPEC+ agreed its deepest cuts to production since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others.

Brent crude was up 28 cents, or 0.3%, at $92.08 a barrel at 1351 GMT (9:51 a.m. Eastern), while U.S. West Texas Intermediate (WTI) crude rose 7 cents, or 0.1%, to $86.59 a barrel.

Both contracts rose sharply in the last two days.

The cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising U.S. interest rates and a stronger dollar.

In August, OPEC+ missed its production target by 3.58 million bpd as several countries were already pumping well below their existing quotas.

Lamb Weston is higher in Wednesday trading. The frozen french fry producer topped Wall Street profit estimates and matched revenue expectations. The company also reaffirmed its fiscal 2023 outlook.

Fiscal first quarter net sales rose 14.4% to $1.13 billion from a year ago; analysts expected $1.13 billion.

Net income for the three months ended August 28 increased 678% to $232 million. Adjusted earnings per share was 75 cents compared to the estimate of 49 cents.

The company projects fiscal 2023 net sales of $4.7 billion to $4.8 billion.

“We expect the potato crop in our growing regions to be at the lower end of historical averages with good overall quality and below average yields due to the significant heat waves late in the season,” the company said.

“While near-term demand trends may continue to be volatile as consumers navigate this inflationary environment, our recent announcement to expand capacity in Argentina, along with our ongoing investments in Idaho and China, demonstrate our confidence in the long-term health and growth outlook of the frozen potato category.”

Room service hotel staff carries breakfast tray

U.S. service activity slowed slightly in September but still showed growth for the 28th consecutive month.

The Institute of Supply Management’s Services PMI registered 56.7%, 0.2 percentage point lower than August's reading of 56.9%.

A Services PMI above 50.1%, over time, generally indicates an expansion of the overall economy.

The Business Activity Index registered 59.1%, a decrease of 1.8 percentage points compared to the reading of 60.9% in August.

The New Orders Index figure of 60.6% is 1.2 percentage points lower than the August reading of 61.8%.

Helen of Troy opened 16% lower. The owner of brands including Braun, Honeywell and Vicks cut its fiscal 2023 outlook.

The company now expects consolidated net sales of $2.00 billion to $2.05 billion, which implies a decline of 10.0% to 7.8%, and a core business decline of 8.6% to 6.4%.

Helen of Troy previously guided to net sales of $2.15 billion to $2.20 billion, which implies a decline of 3.3% to 1.0%, and a core business decline of 1.8% to growth of 0.5%.

GAAP diluted earnings per share (EPS) is now seen at $4.26 to $4.93 and consolidated non-GAAP adjusted diluted EPS in the range of $9.00 to $9.40.

That’s down from $6.51 to $7.11 and $9.85 to $10.35, respectively.

Fiscal second quarter net sales grew 9.7% to $521.4 million. The increase was primarily due to the contribution from the acquisitions of Osprey and Curlsmith.

ECONOMY

Mortgage activity hits 25-year low as rates rise

The Federal Reserve's strategy of raising interest rates in an attempt to fight sky-high inflation is sending mortgage rates higher, hurting home buyers.

Mortgage applications are slowing at a rapid pace as rates for a 30-year loan near 7%.

Stocks traders (FBN)

U.S. equity futures are giving back some of the gains from the previous two sessions.

The major futures indexes suggest a decline of about 1% when the opening bell rings.

Oil inched lower on Wednesday after gains in recent days as OPEC+ producers looked set to agree deep output target cuts at the group's meeting in Vienna.

U.S. West Texas Intermediate (WTI) crude traded around $86.00 a barrel.

Brent crude was around $91.00 a barrel.

Traders will be watching a slew of economic reports including ADP's report on private sector hiring, trade deficit and services PMI .

Asian shares advanced, led by a nearly 6% jump in Hong Kong's share benchmark as markets there caught up after reopening from a holiday.

Japan's benchmark Nikkei 225 added 0.5% and markets in mainland China remained closed for a holiday.

On Tuesday, the Dow Jones Industrial Average climbed more 2.8% while the S&P 500 surged 3.1%. The Nasdaq composite climbed 3.3% and the Russell 2000 advanced 3.9%.

Oil rigs pumping (Reuters)

Oil inched lower on Wednesday after gains in recent days as OPEC+ producers looked set to agree deep output target cuts at the group's meeting in Vienna.

U.S. West Texas Intermediate (WTI) crude traded around $86.00 a barrel.

Brent crude was around $91.00 a barrel.

Both contracts rose sharply in the last two days.

The United States is pressing OPEC+ producers to avoid making deep cuts, a source familiar with the matter told Reuters, as President Joe Biden looks to prevent a rise in U.S. gasoline prices.

Gas prices (AAA)

The average price of a gallon of gasoline gained again on Wednesday to $3.831, according to AAA.

Tuesday's price was $3.805. 

Gas hit a high of $5.016 on June 14. 

Diesel's price slipped to $4.866 per gallon.

Bitcoin was trading around $20,000, after a two-day winning streak.

For the week, Bitcoin was trading more than 6% higher.

The cryptocurrency is down more than 56% year-to-date.

Ethereum was trading around $1,300, after a gain of 2% in the past week.

Dogecoin was trading at 6 cents, after gaining more than 8% in the past week.

OPEC logo (Reuters)

Here are the key events taking place on Wednesday that could impact trading.

OIL MEETING: OPEC+ meets on Wednesday and may be set for a large cut in oil output.

The potential OPEC+ cut could spur a recovery in oil prices, believed to have dropped from $120 three months ago to about $90 due to fears of a global economic recession, rising U.S. interest rates and a stronger dollar, according to Reuters. 

ADP REPORT: The payroll processing firm releases its National Employment report for September.

Economists anticipate a gain of 200,000 private-sector jobs. That would be an improvement from a disappointing 132,000 new jobs in August, which was less than half the 288,000 estimate. 

TRADE BALANCE: The monthly deficit in goods and services for July is expected to narrow for the fifth month in a row to $67.7 billion. 

SERVICES PMI: The Institute for Supply Management releases its non-manufacturing PMI for September. This key gauge of services sector activity is expected to slip to 56.0. That’s after rising unexpectedly in August to the highest since April on solid growth in new orders. Keep in mind 50 is the dividing line between an expanding and contracting services sector.

OIL INVENTORIES: The DOE’s Energy Information Administration will release its inventory report for last week.

Click here for more on Wednesday's key events: OPEC+ output cut on tap, ADP report and more

Senator Roger Marshall, a Republican from Kansas, holds cash during a news conference with Senate Republicans on inflation in Washington, D.C., U.S., on Wednesday, Feb. 16, 2022. Sarah Silbiger/Bloomberg via Getty Images

EXCLUSIVE – Sen. Roger Marshall, R-Kan., introduced two pieces of legislation meant to prevent overreach at the Internal Revenue Service after President Biden signed a law expanding the agency.

The two bills, obtained exclusively by Fox Business, were introduced in response to Democrats' Inflation Reduction Act.

The Preventing Frivolous Actions by IRS Agents Act would compensate eligible U.S. taxpayers who are incorrectly hit with a failed IRS audit. Under the bill, taxpayers would be paid following the disposition of their case, which includes the completion of judicial proceedings.

The bill defines an eligible taxpayer as a "taxpayer whose gross income for the taxable year in which the audit is commenced does not exceed $400,000, and who is not convicted of any crime related to the audit."

"Joe Biden and the Democrats stuck working and middle-class Kansans with a massive spending scam that gives the IRS the green light to aggressively snoop around in their personal finances," Marshall said. "Defending a frivolous audit is expensive and the IRS should pay the bill, not innocent Americans who were wrongly targeted by an overzealous federal accountant."

Read more on the story by clicking here: Sen. Marshall introduces bills designed to prevent IRS overreach following agency expansion

Residential homes in San Francisco, California, US, on Thursday, Sept. 8, 2022. David Paul Morris/Bloomberg via Getty Images

U.S. home prices are finally falling from record highs notched earlier this year, and they are likely to see even steeper declines in coming months as the Federal Reserve ratchets up its fight against inflation.

Prices are already posting the most significant monthly declines since the 2009 housing crash, according to a new release from Black Knight Data & Analytics. Median home prices tumbled 0.98% in August from a month earlier, following a 1.05% drop in July. In total, median home prices are down 2% since their June peak.

"Together, they represent two straight months of significant pullbacks after more than two years of record-breaking growth," said Black Knight President Ben Graboske.

Recent outlooks from major Wall Street firms suggest this is just the beginning of what's likely to be a sharp plunge in U.S. home prices.

Morgan Stanley anticipates that home prices could tumble another 7% by the end of 2023.

For more on the story, click here: Housing market in the United States headed for major slowdown