Fed Chairman Powell Warns Stimulus Withdrawal Could Jeopardise Economic Gains

In corporate news, car rental company Hertz (HTZ), which has seen its share price tank by more than 85% since the start of the year and is now in bankruptcy protection, has halted a planned share sale. The company had planned to sell $500m in shares that it warned could be rendered worthless by bankruptcy proceedings. Jay Clayton, chairman of the SEC, told CNBC earlier on Wednesday that the financial watchdog had problems with the share sale, and had informed Hertz it had comments to make.

S&P 500: -0.4% Wednesday, -3.6% YTD (SPY)

Dow Jones Industrial Average: -0.7% Wednesday -8.5% YTD (DIA)

Nasdaq Composite: +0.2% Wednesday, +10.5% YTD (COMP)

UK inflation sinks to four-year low

London markets closed before the American COVID-19 case news drove US-listed shares into the red; the FTSE 100 gained 0.2% on Wednesday, with the FTSE 250 up 0.7%. In economic news, the UK inflation rate slowed to 0.5% in May, its lowest level since mid 2016. One major drag was fuel prices, which declined by 16.7% during the month, although food prices rose as supermarkets were allowed to remain open. The Bank of England’s target rate for the Consumer Price Index - the main measure of inflation - is 2%. 

Elsewhere, house building giant Taylor Wimpey (TWODF) announced its plans to raise £500m to spend on land, which it believes has been devalued by the pandemic and instead, created opportunity. According to the FT, over the past few months the company has bought a dozen sites for more than £100m, but intends to spend much more. In the FTSE 100, energy firm SSE (SSEZF) was by far Wednesday’s biggest winner. The company added 9.1% to its share price, after beating consensus earnings figures and announcing it plans to continue backing its dividend, which currently yields around 7%.

FTSE 100: +0.2% Wednesday, -17.1% YTD

FTSE 250: +0.7% Wednesday, -19.7% YTD

What to watch

Kroger: Kroger (KR) is one of America’s largest retailers, operating thousands of supermarkets and department stories, and is also one of America’s biggest employers. The company, which reports earnings on Thursday, has seen its share price gain 13.2% year-to-date. Since the pandemic began, the company has hired more than 100,000 workers, in order to handle demand for staple items while needing to meet additional safety requirements. Investors have high hopes for its Thursday report, and will be waiting for a substantial earnings beat. Currently. 10 analysts rate the stock as a buy, one as an overweight, 13 as a hold, and one as a sell. 

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