CARR - Wall Street Breakfast Podcast: FOMC Day 1

2023-09-19 07:02:33 ET

Summary

• Federal Reserve expected to keep rates unchanged.
• Instacart prices IPO at the top of the range.
• Carrier considers creating a separate public company for its fire unit.

Listen below or on the go on Apple Podcasts and Spotify

Federal Reserve expected to keep rate unchanged — then what? (00:25) Instacart ( CART ) prices at the high end of range, gets $10B valuation . (01:33) Carrier ( CARR ) reportedly explores listing commercial, residential fire unit. (02:29)

This is an abridged transcript of the podcast.

It’s day one of the FOMC two day policy meeting .

The Federal Open Market Committee is widely expected to keep rates unchanged when it releases its decision on Wednesday.

You’ve probably noticed that almost all Fed officials in their remarks have been repeating Fed Chair Jerome Powell's mantra of "higher for longer."

We’re also keeping an eye out for the summary of economic projections.

The SEP will offer a view of how high the central bank may go and for how long. But keep in mind that the projections do not represent decisions on a rate path. Rather, they reflect individual Fed members' expectations of how the economy and policy will unfold.

There are some wild cards to watch. Uncertainty always looms over the Fed's economic outlook, but Powell may emphasize that fact even more during his press conference given the recent auto workers' strike and a potential government shutdown.

We’re interested in your opinion on this topic. Is the Federal Reserve done hiking interest rates in 2023/2024? There’s a link to the Wall Street Breakfast survey in show notes.

Instacart ( CART ) priced its initial public offering at $30 per share, at the top of a previously stated range, giving it a valuation of $10B .

Instacart ( CART ) boosted the range for its IPO to $28 to $30 to raise as much as $660 million in the offering on optimism thanks to the Arm Holdings ( ARM ) initial public offering.

The company will issue 22M shares in total plus up to an additional 3.3M shares in aggregate, according to its latest S-1 filing . At the high end of the range, the IPO would have raised $660M, and the company will be valued between $9.3B and $9.9B.

The delivery app filed to go public last month and said in its prospectus that sales for the quarter ended in June rose 15% to $716M. Net income totaled $114M.

Instacart's offering comes just days after Arm Holdings ( ARM ) priced at the top of its range and jumped 25% in its first day of trading.

Carrier Global (NYSE: CARR ) is considering creating a standalone , public company out of its commercial and residential fire unit to list on the stock market.

The unit, which makes detectors for smoke and carbon monoxide, generates more than $200M in annual EBITDA.

Carrier (CARR), which is looking to slim down to focus on its energy and climate businesses, has said it is exiting its fire and security units as well as its commercial refrigeration businesses.

According to a Bloomberg report, the security business could fetch more than $3B in a sale, according to the report.

Carrier ( CARR ) also is said to be exploring a sale of its industrial fire business, which includes brands that help protect against gas and fire damage.

Other headlines to look out for on Seeking Alpha:

UAW to strike at more factories if 'serious progress' not made by Friday

Pepsi stands to lose as Burger King said to negotiate with Coke: Report

Amazon considers new subscription programs: Report

Nike earnings are next week - analysts expect a rough update

On our catalyst watch for the day,

• TechCrunch Disrupt will run for three days. Several AI sessions could attract attention from analysts. The Startup Battlefield will showcase the top 200 startups from around the world.

• Crowdstrike ( CRWD ) CEO George Kurtz will give a talk on "The Future of Cybersecurity and Generative AI" at the Fal.Con Conference.

U.S. stocks on Monday ended largely unchanged while Treasury yields made small moves, as market participants stayed on the sidelines ahead of the Federal Reserve's rate decision on Wednesday.

The S&P 500 (SP500) advanced 0.07%. The Dow ( DJI ) added 0.02%, while the Nasdaq ( COMP.IND ) gained 0.01%.

Of the 11 S&P sectors, six ended in positive territory. Consumer Discretionary and Real Estate topped the losers.

Energy was the top gainer as WTI crude oil futures (CL1:COM) pushed above $92/bbl, extending a gain fueled by the recent larger-than-anticipated OPEC+ production cuts.

Treasury yields were mixed. The 10-year yield (US10Y) was down 1 basis point to 4.31%, while the 2-year yield (US2Y) was up 3 basis points to 5.06%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.1%, the S&P 500 is up 0.1% and the Nasdaq is up 0.1%. Crude oil is up 1.1 % at more than $92 a barrel. Bitcoin is up 1.5% at more than $27,000.

In the world markets, the FTSE 100 is up 0.1% and the DAX is down 0.07%. And the market in India is closed for a holiday.

The biggest stock movers for the day premarket: Equinox Gold (NYSE: EQX ) is down more than 10% following the announcement of a $150M offering of unsecured convertible senior notes due in 2028.

For further details see: