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Snowflake, Dow Futures, Federal Reserve, Facebook - 5 Things You Must Know Wednesday

TheStreet logo TheStreet 9/16/2020 Joseph Woelfel
Snowflake, Dow Futures, Federal Reserve, Facebook - 5 Things You Must Know Wednesday © TheStreet Snowflake, Dow Futures, Federal Reserve, Facebook - 5 Things You Must Know Wednesday

Here are five things you must know for Wednesday, Sept. 16:

1. -- Stock Futures Rise Ahead of Fed Announcement

Stock futures rose Wednesday as investors awaited a policy announcement from the Federal Reserve.

Contracts linked to the Dow Jones Industrial Average were up 134 points, S&P 500 futures gained 17 points and Nasdaq futures rose 32 points.

Stocks rose Tuesday and the S&P 500 finished higher for the third consecutive session as tech stocks led the charge. The Nasdaq, home to a fair number of the largest U.S. tech stocks, rose 1.2%.

The Federal Reserve is expected to hold rates near zero, where it lowered them to at the beginning of the coronavirus pandemic in March, and reaffirm its new, more relaxed stance on inflation.

Federal Reserve Chairman Jerome Powell said in August the central bank would keep interest rates low even if inflation rises above its target levels.

The Fed will announce its decision on interest rates at 2 p.m. ET, followed by a press conference from Powell.

The economic calendar in the U.S. Wednesday also includes MBA Mortgage Applications for the week ended Sept. 11 at 7 a.m., Retail Sales for August at 8:30 a.m. and Oil Inventories for the week ended Sept. 11 at 10:30 a.m.

2. -- Snowflake Valued at $33.3 Billion as IPO Prices Above Range

Shares in the initial public offering of Snowflake, the cloud storage and computing company, were priced above an already-increased range, valuing the company at $33.3 billion.

Snowflake will sell 28 million shares at $120 each, according to reports. The company will raise about $3.4 billion in the offering.

The stock will make its debut Wednesday on the New York Stock Exchange under the symbol "SNOW."

TheStreet's Jim Cramer said the IPO could wind up being "the biggest hit of the year."

Why Jim Cramer's Action Alerts PLUS Is Considering Buying Snowflake

The offering price marks the second increase since Snowflake's IPO filing. It originally set a midpoint range of $80 a share, but raised it to a midpoint of $105 in a new filing on Monday.

Video: Tech sell-off is a headwind for markets: Citi Private Bank (CNBC)


The increased prices suggest high demand for Snowflake's offering.

Salesforce and Berkshire Hathaway last week opted to buy several million shares in a show of confidence for the tech company.

Snowflake's financial disclosures show high sales growth: Revenue as of Jan. 31, 2020, had grown to $264.7 million from $96.7 million, a year-over-year increase of 178%.

3. -- FTC Prepares Possible Antitrust Suit Against Facebook

Facebook declined in premarket trading Wednesday following a report that said the Federal Trade Commission was readying a possible antitrust case against the social media giant.

Charges could be filed in the next few months, The Wall Street Journal reported.

The FTC has spent more than a year investigating Facebook on antitrust grounds, but no final decision has been reached on whether to sue the company, the Journal reported. The probe of Facebook is part of a broader investigation of market-leading internet companies initiated by the FTC and a collection of other state and federal offices. .

Sources told the Journal that the FTC interviewed Facebook CEO Mark Zuckerberg in the course of the investigation, and that charges could be filed by the end of this year. The lawsuit needs to pass muster with the FTC's five-member commission, which will vote on whether or not to file charges.

Past reports suggested that investigators were honing in on Facebook's long track record of copying, or acquiring, smaller apps that were perceived as a threat to the social media giant.

The stock fell 1.48% in premarket trading to $268.40.

4. -- Trump Says Close to a Decision on Oracle-TikTok Alliance

President Donald Trump said his staff were "very close to a deal" on whether to approve Oracle's alliance with China-based video sharing app TikTok following a security review.

The president added he had "high respect" for Oracle Chairman Larry Ellison.

According to The Wall Street Journal, China's ByteDance would retain a majority ownership stake in the TikTok app, while Oracle would serve as TikTok's U.S. technology partner.

TikTok's global business also would become a company based in the U.S. that would remain a unit of ByteDance, a person familiar with the deal told the Journal, with Oracle retaining a minority stake in that company.

The Committee on Foreign Investment in the U.S., known as Cfius, reviewed the deal late Tuesday afternoon but didn't immediately announce a recommendation. Settlement of the agreement has a deadline of Sunday.

5. -- FedEx Smashes Earnings Expectations

FedEx was rising sharply in premarket trading Wednesday, up 9.57% to $259.33, after the package-delivery service reported earnings and sales for its fiscal first quarter that smashed analysts' expectations.

For the quarter ended Aug. 31, FedEx reported adjusted earnings of $4.87 a share, well above expectations of $2.70. Revenue rose 14% to $19.3 billion and topped forecasts of $17.55 billion.

"Our earnings growth underscores the importance of our business initiatives and investments over the last several years, and, in many ways, the world has accelerated to meet our strategies," CEO Frederick W. Smith said in a statement.

FedEx said its strong first quarter stemmed from volume growth in international priority and U.S. domestic residential package services. FedEx also improved yields in its ground and freight operations during the quarter.

FedEx didn't provide an earnings forecast for fiscal 2021. But it did raise its capital-spending forecast for the year by $200 million to $5.1 billion, driven by additional capacity initiatives.

This article was originally published by TheStreet.

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