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Coming up Focusing on the Latest Signals from the Fed on Monthly Bond Purchases

Coming up Focusing on the Latest Signals from the Fed on Monthly Bond Purchases

MARKET RECAP at 4 pm ET

Indexes rose sharply with investors Coming Up focusing on the latest signals from the Fed on monthly bond purchases. Longer-dated Treasuries advanced, while the dollar edged up in a choppy trading. Oil jumped after U.S. crude inventories fell more than expected. Palladium and platinum climbed, lifted by an overall uptick in as jitters over Evergrande faded. Gold, meanwhile, slipped.

STOCKS Close Chng %Chng Yr-high Yr-low DJIA 34260.95 341.11 1.01 35631.19 26143.77

Nasdaq 14896.85 150.45 1.02 15403.44 12397.05 S&P 500 4395.63 41.44 0.95 4545.85 3662.71 20401.49 157.20 0.78 20897.57 15418.46 FTSE 7083.37 102.39 1.47 7224.46 6397.24 Eurofirst 1786.88 17.62 1.00 1836.57 1521.71 /Bryan Woolston Nikkei 29639.40 -200.31 -0.67 30795.78 26954.81 A file photo of hundreds of people lining up outside a Career Center hoping to find Hang Seng 24221.54 122.40 0.51 31183.36 23871.84 assistance with their unemployment claim in Frankfort, Kentucky, U.S. June 18, 2020. TREASURIES Yield Price

10-year 1.3057 6 /32 On the U.S. economic schedule, the report is also expected to show the 2-year 0.2403 -2 /32 Labor department is scheduled to number of people continuing to 5-year 0.8553 -4 /32 release initial claims for state receive benefits after an initial week of 30-year 1.8211 27 /32 unemployment benefits for the week aid dropped to 2.650 million in the ended Sept. 18. It is expected to have week ended Sept. 11, from 2.665 FOREX Last % Chng fallen to 320,000 compared with million in the prior week. The IHS /Dollar 1.1694 -0.25 332,000 in the previous week. The Markit survey's flash services sector Dollar/Yen 109.79 0.53 Sterling/Dollar 1.3620 -0.29 Dollar/CAD 1.2757 -0.45 TR/HKEX RMB 99.18 0.20 KEY ECONOMIC EVENTS

COMMODITIES ($) Price Chng % chng Events ET Poll Prior

Front Month Crude /barrel 72.03 1.54 2.18 Initial jobless claims 0830 320,000 3,32,000 Spot gold (NY/oz) 1766.37 -7.87 -0.44 Jobless claims 4-week average 0830 -- 3,35,750 Copper U.S. (front month/lb) 0.0423 0.0010 2.42 CRB Index Total Return 235.74 3.69 1.59 Continued jobless claims 0830 2.650 mln 2.665 mln National Activity Index for Aug 0830 -- 0.53 Price $ Chng % Chng S&P 500 Markit Manufacturing PMI Flash for Sept 0945 61.5 61.1 GAINERS Markit Services PMI Flash for Sept 0945 55.0 55.1 APA Corp (US) 20.12 1.35 7.19 Corp 30.47 1.98 6.95 Markit Composite Flash PMI for Sept 0945 -- 55.4 MGM Resorts International 43.28 2.73 6.73 Leading index change mm for Aug 1000 0.7% 0.9% LOSERS KC Fed Manufacturing for Sept 1100 -- 22 FedEx Corp 229.05 -23.02 -9.13 KC Fed Composite Index for Sept 1100 -- 29 Incyte Corp 69.59 -6.47 -8.51 Inc 343.21 -14.27 -3.99

COVID-19 vaccinations and easing curbs boosted consumer spending. Investors will be on the lookout for the company's commentary on supply- chain concerns and the impact of the Delta variant on its business.

Accenture Plc is expected to show a rise in fourth-quarterly revenue driven by a demand for its digital, cloud and security services during the pandemic.

U.S. Centers for Disease Control and Prevention advisory panel could vote on the use of a third shot of Inc and partner BioNTech SE's COVID-19 . The CDC's Advisory Committee on Immunization Practices kicked off on Wednesday a two-day discussion if Americans should get the third vaccine shot, should it be A woman walks past a store of the sporting goods retailer Nike Inc at a shopping complex in authorized for use by the Food and , China, March 25, 2021. REUTERS/Florence Lo Drug Administration.

PMI for September is expected to drop for the rest of the year, with analysts The Bank of England is scheduled to to 55 from 55.1 in the previous month. expecting factory closures in announce its interest rate decision The flash manufacturing sector PMI due to the COVID-19 pandemic to have amid concerns over slowing economy is likely to have inched up to 61.5 from a major impact on footwear supplies in and surging inflation. 61.1 in the previous month. the coming months. 's unemployment rate likely Nike Inc is expected to post a rise in Membership-only retail chain Costco rose to 10.8% in second-quarter from first-quarter sales and profit, but all Wholesale Corp is expected to post a 10.2% in the last quarter. eyes will be on the company's outlook jump in fourth-quarter revenue as

KEY RESULTS

Company Name* Quarter ET Smart Estimates EPS Estimates** Year Ago Rev Estimates (mln)

Accenture Q4 BMO $2.19 $2.19 $1.70 $13,416.71 Costco Wholesale Q4 16:15 $3.63 $3.57 $3.04 $61,296.35 Q1 BMO $1.64 $1.65 $0.56 $2,237.10 Nike Q1 AMC $1.12 $1.11 $0.95 $12,464.00

*Includes companies on S&P 500 index. **Estimates may be updated or revised; release times based on company guidance or past practice.

I/B/E/S EPS and revenue estimates, and StarMine Smart Estimates, provided by .

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Market Monitor

Stocks ended sharply higher as investors took in stride the latest signals from the Federal Reserve, including clearing the way for the to reduce its monthly bond purchases soon. Overall indicators in the economy "have continued to strengthen," the Fed said in its latest statement. "Across the board it’s exactly what we expecting. The Fed took another step towards a formal taper announcement, and that’s probably going to come at the next meeting or two," said Tom Garretson, senior portfolio strategist at RBC Wealth Management in Minneapolis. The Dow Jones Industrial Average rose 1.01% to 34,260.95, the S&P 500 gained 0.95% to 4,395.64 and the Composite added 1.02% to 14,896.85. A trader works on the floor at the in Manhattan, , U.S., Most Treasury prices rose after the August 20. REUTERS/Andrew Kelly Federal Reserve said it would reduce its monthly bond purchases "soon" and signaled higher interest rates may China's Evergrande said it would make most recent week to 10.6 million bpd, follow more quickly than expected. a bond coupon payment. The dollar the EIA said. BP said all four of its Joseph LaVorgna, chief economist for index was last 0.17% up at 93.36. offshore facilities in the region have the Americas at French bank Natixis in Property giant and Asia's biggest junk resumed operations after Hurricane New York, said without knowing who is bond issuer Evergrande said it Ida, brought back online and producing who in what is known as the Fed's dot- "resolved" one payment due on as of Sept. 12. U.S. West Texas plot of economic projections, it's hard Thursday via a private negotiation, Intermediate (WTI) crude futures to say if it accurately reflects the central easing concerns of default and rose 2.18%, to $72.03 a barrel. Brent bank's thinking, as Fed Chair Jerome possible contagion risk, while the crude futures jumped 2.18%, to Powell and other policy-setters are People's Bank of China injected 90 $75.98 a barrel. considered dovish. " don't think the billion yuan into the banking system to Fed’s tightening is going to be support markets. Palladium and platinum jumped, lifted anywhere near as hawkish as they dollar rose 0.10% versus the by an overall uptick in commodities as anticipate. It’s going to be hard for greenback to $0.7238. The dollar fell jitters over China Evergrande faded, them to execute on this plan as the 0.19% against the offshore Chinese helping the autocatalysts recover some economy slows next year," LaVorgna yuan at 6.4676 yuan. ground from a slide driven by a said. Benchmark 10-year notes were slowdown in the auto sector. Gold, up 5/32 to yield 1.3091% after the Fed Oil prices climbed after U.S. crude meanwhile, fell after the Fed cleared released its policy statement and stocks fell to their lowest levels in three the way to reduce its monthly bond summary of economic projections. 30- years as refining activity recovered purchases "soon" and signaled interest year bonds were 26/32 higher, from recent storms. U.S. crude rate increases may follow more quickly yielding 1.8231%. inventories last week fell by 3.5 million than expected. Palladium surged barrels to 414 million barrels, the 5.69% to $2,014.87 per ounce and The dollar was choppy on the heels of lowest since October 2018, the U.S. platinum climbed 4.36% to $995.71 per the latest policy announcement by the Energy Information Administration said. ounce. Spot gold meanwhile, fell Federal Reserve, while risk-sensitive Oil facilities in the Gulf of Mexico 0.44% at $1,766.37 per ounce and currencies such as the continue to return to production, with U.S. gold futures slipped 0.51% to and Chinese yuan strengthened after weekly output rising 500,000 bpd in the $1,769.10 per ounce.

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Top

Fed signals bond-buying taper coming 'soon,' rate hike in 2022 The Federal Reserve cleared the way to reduce its monthly bond purchases "soon" and signaled interest rate increases may follow more quickly than expected, with nine of 18 U.S. central bank policymakers projecting borrowing costs will need to rise in 2022. The moves, which were included in the Fed's latest policy statement and separate economic projections, represent a hawkish tilt by a central bank that sees inflation running this year at 4.2%, more than double its target rate, and is positioning itself to act against it. That action may proceed slowly, with interest rates seen rising to 1% in 2023, faster than projected by the Fed in its projections in June, and then to 1.8% in 2024, which would still be considered a loose monetary policy The Federal Reserve building is set against a blue , amid the coronavirus disease (COVID-19) stance. Inflation throughout that time outbreak, in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque would be allowed to run slightly above the Fed's 2% target, consistent with its new, more tolerant approach to the markets and choose winners and sales and app downloads are higher pace of price increases, while losers," Sweeney said on . The than reported. The announcement unemployment is seen falling back to two companies have been locked in a comes as Facebook and the larger around the pre-pandemic of 3.5%. legal dispute since August last year digital advertising industry continues to Policymakers also downgraded their when the game maker tried to get grapple with the privacy controls expectations for economic growth this around Apple's 30% fee on some in- implemented by Apple in April, which year, with gross domestic product app purchases on the App Store by are designed to limit digital advertisers expected to grow 5.9% compared to launching its own in-app payment from tracking iPhone users for the 7.0% projected in June. system. advertising purposes without their consent. Apple bars Epic's 'Fortnite' from Facebook warns it is App Store until all court appeals end 'underreporting' iOS ad results amid Restaurant-software maker Toast Apple has blacklisted "Fortnite" from Apple privacy changes valued at nearly $33 billion as the iPhone maker's popular App Store Facebook said it is underreporting the shares surge in debut for several years until all the court results of its advertising business on Toast fetched a valuation of nearly $33 appeals are done, Chief Apple iOS devices, acknowledging that billion in its Executive Officer Tim Sweeney said. recent privacy changes from the debut, as shares of the restaurant Epic Games' opening brief in its appeal iPhone maker have made it more software provider jumped, to the U.S. 9th Circuit Court of Appeals expensive and difficult for brands to underscoring a deep investor appetite is due Dec. 12, according to a court advertise on Facebook. Facebook said for new tech stocks. The stock opened filing and Apple's reply is due by Jan. in a blog post it estimates it is at $65.26, compared with its initial 20, 2022. The full appeal process could underreporting "conversions," an public offering price of $40 per share. take years. Sweeney took to Twitter, industry term that includes buying of The company sold 21.7 million shares calling out Apple's move and said the products or other actions a person in its IPO, raising about $869.6 million. company will continue to fight the tech takes after seeing an ad, by 15%, Its IPO was priced above an earlier giant. "This is another extraordinary adding that the figure varied among targeted price range of $34 to $36 per anticompetitive move by Apple, individual advertisers. Facebook said it share. Toast’s shares climbed 56.73% demonstrating their power to reshape believed actual conversions such as to $62.69 for the day. Meanwhile,

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enterprise software maker Freshworks ahead of the holiday season. Three development of a full stack was valued at $12.2 billion in its months ago, Nike gave a rosy outlook collaboration platform," Harrigan said. Nasdaq debut after shares opened for the rest of the year as it benefited 21% above the initial offering price, from consumers splurging on sneakers GE, EDF in talks over possible sale indicating strong demand for firms that for running and hiking as they returned of operations in France have thrived during the pandemic. to their routines after over a year of is in preliminary talks Shares of Freshworks closed 32.08% staying at home. Still, some analysts with EDF over the possible sale of GE higher at $47.55. To read more, click have cut their outlook for Nike's sales, Steam Power's nuclear activities in here predicting that lockdowns and factory France, the two energy firms said. closures in Vietnam, where about half "There is no certainty regarding the of all Nike footwear is manufactured, outcome of this work and of these will cause shortages during the crucial exploratory discussions," EDF said in a shopping season. statement sent to Reuters. "EDF is currently analysing conditions under Entain soars on DraftKings bid; which the interests of the EDF Group MGM keeps poker face would be best served." GE is EDF's Entain's shares hit a record high after main supplier of steam turbines and the British gambling group received a electrical components for nuclear $22.4 billion takeover proposal from power plants such as France's REUTERS/Lisa Baertlein U.S. rival DraftKings, double a bid it Flamanville-3 and Britain's Hinkley rejected from joint venture partner Point C. Cheerios-owner sales MGM in January. Shares in Entain, jump on pet food boom which owns traditional Ladbrokes and General Mills reported better-than- Coral betting shops as well as newer expected quarterly sales, as strong online brands such as bwin and growth in its pet foods business partypoker, jumped as much as 11% to cushioned a slowdown in demand for hit 25 pounds and top 's its cooking sauces and baking benchmark index. That compared with products. Net revenue at its pet foods the 28 pounds cash and stock proposal unit jumped 25% in the first quarter, from DraftKings, a 46.2% premium to benefiting from a rise in the adoption of Entain's closing price on Monday, REUTERS/Lisa Baertlein cats and dogs by people looking to which followed an earlier approach of ease the stress of the more than a year 25 pounds rejected by Entain. , Woolworths to expand -long pandemic. General Mills has also DraftKings' interest comes weeks after reusable packaging trials to stores launched new items such as Tastefuls it clinched a $1.6 billion deal to buy Kroger and 's Woolworths are cat food and bought ' pet U.S. rival Golden Nugget. expanding in-store trials of selling food, treats business to take advantage of drink, household, and beauty products the demand surge. That helped drive may face delay on key Five9 in reusable packaging, joining a list of total net sales 4.1% higher to $4.54 deal after DOJ review-analysts such global chains looking to reduce billion, beating the analysts' average Zoom Video Communications' plastic waste. After an online test estimate of $4.29 billion, according to proposed $15 billion deal for cloud- in 2019, Kroger is expanding the trial Refinitiv data. Quarterly net earnings based call center operator Five9 may with Loop, a global reusable packaging attributable to General Mills fell 2% to be delayed by a U.S. Justice platform, to 25 Fred Meyer banner $627 million, or $1.02 per share. On an Department-led committee review but stores in Portland, Oregon, for six adjusted basis, it earned 99 cents per is unlikely to be scrapped, analysts months starting in the second half of share, compared with estimates of 89 said. The committee is reviewing the 2021, Keith Dailey, Kroger's VP of cents per share. deal to see if it "poses a risk to the corporate affairs, told Reuters. Through national security or law enforcement a separate Loop aisle, shoppers will be Nike's Vietnam supply hurdles in interests", according to a letter filed able to pick up health & beauty, focus ahead of quarterly results with U.S. regulators. Analysts do not grocery, and cleaning products in glass Are sneakerheads in for a rough expect the government to block the containers and aluminum boxes. They holiday season? Nike's updates to its deal, however, Benchmark analyst can be returned to stores when full-year sales outlook on Thursday will Matthew Harrigan said it could imperil finished, to be cleaned, refilled, and likely answer that pressing question for the expected closure in the first half of used again. Wall Street as the world's largest next year. "We retain ardent conviction sportswear maker deals with that the Zoom Five9 transaction makes unprecedented supply challenges strategic sense in fostering the

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A Haitian passport is seen in a pile of trash near the International Bridge between Mexico and the U.S., where migrants seeking asylum in the U.S. are waiting to be processed, in Del Rio, Texas, U.S., September 21. REUTERS/Marco Bello

Insight and Analysis

Soaring gas prices ripple through JPMorgan's 2021 deal spree aims to FOCUS-U.S. farmers face supply heavy industry, supply chains fill the few holes left in its global shortages, higher costs after Global record high natural gas prices operations Hurricane Ida are pushing some energy-intensive JPMorgan Chase & Co has been on a Troy Walker's phone will not stop companies to curtail production in a boutique-business buying spree this ringing at his farm cooperative, trend that is adding to disruptions to year, acquiring or investing in around with growers needing fertilizer for their global supply chains in some sectors 30 companies since the start of 2021. wheat fields in the coming months. In such as food and could result in higher In September alone, the bank took a Kentucky, corn and soybean farmer costs being passed on to their close-to 75% stake in 's Caleb Ragland said shelves at his local customers. Some companies, including payments business, bought the media farm supplier are often bare of weed steel producers, fertiliser company that owns Zagat and on killer and other crop manufacturers and glass makers, have Tuesday bought a college financial chemicals. He expects the situation had to suspend or reduce production in planning platform used by more than 5 could get worse. and Asia as a result of spiking million students in the . energy prices.

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CANADA

Market Monitor COMING UP Statistics is expected to report The 's S&P/ The U.S. dollar was 0.43% lower retail sales likely fell 1.2% in July, TSX composite index rose 0.78% to against the Canadian dollar at following an advancement of 4.2% in 20,401.49 as energy stocks climbed. C$1.2760. June. Core retail sales likely fell 1.5% in July. The energy group extended gains for a second straight session as crude prices climbed more than $2 after data TSE's S&P/TSX composite Price C$ chng % chng showed U.S. crude stocks fell more GAINERS than expected last week in the wake of Celestica Inc 12.07 1.75 16.96 two hurricanes. The sector was up Parex Resources Inc 21.39 1.51 7.60 Inc 11.64 0.82 7.58 3.94% to 132.87. Ltd 22.60 1.59 7.57 LOSERS The materials sector, which includes International Cda Inc 43.14 -4.35 -9.16 precious and base metals miners and REUTERS/Mark Blinch Franco-Nevada Corp 172.35 -4.77 -2.69 fertilizer companies, added 0.50% to Centerra Gold Inc 9.28 -0.19 -2.01 304.90. TFI International Inc 139.90 -2.78 -1.95

Top News

Canada provincial bonds favored as Liberals have pushed to over C$1 losing the skilled labour crucial to a focus turns to BoC, strategists say trillion, with budget deficits around their clean energy economy if the Canada's provincial bonds appear widest level since World War Two. government does not prioritise more attractive than sovereign debt as transition funding, which the 2015 focus shifts from Canada's election to Canada fossil fuel workers want Climate Agreement recognizes as tightening monetary policy, with a Bank victorious Trudeau to keep important to ensure no workers are left of Canada (BoC) rate hike expected as retraining pledge behind as the world decarbonizes. As early as 2022, two senior investment Prime Minister Justin Trudeau's narrow the clean energy economy takes off, it strategists said. Provincial bonds, election victory this week reinforced will generate some 640,000 jobs by which earn higher yields than Canada's commitment to reach net- 2030, a 50% increase from 2021, with sovereign debt, provide good zero by strong growth in Alberta, industry body diversification options for international 2050, but workers in the country's Clean Energy Canada forecasts. investors, SLC Management Managing sizable fossil fuel sector said they also Director Dec Mullarkey told the Reuters expect him to keep his promises to Canada August factory sales most Global Markets Forum on Tuesday. retrain them for jobs in a clean-energy likely rose 0.5% - Statscan Kevin Headland, senior investment economy. Oil worker advocacy group Canadian factory sales most likely rose strategist at Investment Iron & Earth estimates Canada will by 0.5% in August, driven by higher Management, echoed that view, saying need around C$10 billion ($7.8 billion) sales of petroleum and coal products, the BoC's continued tapering of asset over 10 years to retrain fossil fuel chemical and primary metal industries, purchases amid ongoing fiscal support workers, but is sceptical about Statistics Canada said in a flash should result in a steeper yield curve. government promises to help after past estimate. The estimate was calculated "In Canada, you are likely best off in pledges failed to materialise. "At what based on a weighted response rate of provincials that offer a better yield," point do these stop being promises and 47.0%. The average weighted Headland said. The appeal of start being actions? These are people's response rate for the survey over the sovereign bonds has been driven down livelihoods on the line," said Luisa Da previous 12 months has been 92.5%. by Canada's burgeoning national debt, Silva, executive director of Iron & which Prime Minister Justin Trudeau's Earth. Da Silva said the country risks

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WEALTH NEWS

ECONOMIC DATA U.S. home sales fall, house price inflation cooling U.S. home sales fell in August as supply remained tight, but there are signs that the surge in house prices and the COVID-19 pandemic-fueled demand have probably run their course. The report from the National Association of Realtors on Wednesday showed the smallest share of first-time homebuyers in more than 2-1/2 years and houses continuing to be snapped up after only 17 days on the market. Existing home sales dropped 2.0% to a seasonally adjusted annual rate of 5.88 million units last month. The median existing house price increased 14.9% from a year ago to $356,700 in August. That is a deceleration from a 23.6% jump in May.

U.S. DEBT CEILING U.S. Senate showdown vote on debt limit could come next week The U.S. Senate could see a vote next week on raising Washington's borrowing authority and keeping the government funded, the chamber's No. 2 Democrat said, though Republicans warned that they would vote against the bill.

JPMORGAN INVESTIGATION JPMorgan faces oil bribery probe in Brazilian authorities are investigating whether JPMorgan Chase & Co played a role in an alleged bribery and money laundering scheme that dated back to 2011 and involved state-run oil company , according to documents reviewed by Reuters and two law enforcement sources.

BIOFUEL POLICY Biden administration mulls big cuts to biofuel mandates in win for oil industry -document The administration of U.S. President is considering big cuts to the nation's biofuel blending requirements, according to a document seen by Reuters, a move triggered by a broad decline in gasoline demand during the coronavirus pandemic.

SPAC REGULATION Senate Democrats step up scrutiny of blank-check firms U.S. Senator Elizabeth Warren and three other Senate Democrats sent letters to some of the most prolific SPAC dealmakers, voicing concerns over reports that SPAC insiders exploit regulatory loopholes at the expense of retail investors.

CRYPTOCURRENCY WALLETS to begin testing crypto wallets, with broader launch in early 2022 Robinhood Markets said it plans to begin testing cryptocurrency wallets next month, with a broader rollout in early 2022, allowing its users to move supported digital currencies in and out of their brokerage accounts.

RENEWABLE ENERGY INDUSTRY backs plan for renewable energy industry tax partnerships The White House is backing a plan by House of Representatives Democrats to let renewable energy firms form tax- advantaged partnerships that the oil and gas industry has used for decades to build out the U.S. pipeline and storage infrastructure, according to three people familiar with the matter.

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A child hugs during the weekly general audience at the Paul VI Audience Hall, at the Vatican, September 22, 2021. REUTERS/Yara Nardi

The Day Ahead - North America is compiled by Sourav Bose and Samrhitha Arunasalam in Bengaluru.

For questions or comments about this report, email us at: [email protected].

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