Investing.com -- Mark Zuckerberg heads to the Hill to defend his Libra project, while the EU gets ready to grant another Brexit extension and Russia's energy minister disappoints hopes for more cuts in output from OPEC+. Meanwhile, Microsoft and Caterpillar head a cast of thousands reporting their third-quarter earnings. Here's what you need to know in financial markets on Wednesday, 23rd October.
1. Libra in the balance
Facebook (NASDAQ:FB) founder and chief executive Mark Zuckerberg is due in front of the House Financial Services Committee, the sole witness in a hearing about its plans for the digital currency Libra.
Pressure from Democratic Senators had led a quarter of the initial backers of Libra, including all of its significant partners in the payments industry, to pull out of the project earlier in the month.
At the weekend, the Facebook executive tasked with rolling out Libra, David Marcus, suggested the company could retreat from its ambition to make a global currency and instead produce a string of stablecoins backed by individual national currencies. His comments came two days after a damning G7 report that enumerated a long laundry list of regulatory concerns.
According to prepared remarks, Zuckerberg will say that if regulators block Libra, they risk giving control of the global financial system to China, which is working on similar projects.
2. Boeing’s head of commercial aircraft to leave
The 737 MAX scandal claimed its most senior victim yet at Boeing (NYSE:BA), as commercial aircraft head Kevin McAllister was forced out with immediate effect. He’ll be replaced by services chief Stan Deal.
The news comes just days after explosive revelations that Boeing’s test pilots were aware of problems with the MCAS flight control system as long ago as 2016. Problems with MCAS were responsible for two fatal 737 MAX crashes over the last 18 months.
The Wall Street Journal cited sources as saying that the company is eyeing further personnel changes. There was no hint that Dennis Muilenburg, who was stripped of his duties as chairman earlier this month, may also be forced to vacate the CEO’s chair.
Boeing reports its quarterly earnings before the opening.
3. Stocks set to open flat
U.S. stock markets are set to open flat after disappointing earnings from Texas Instruments (NASDAQ:TXN) after the bell on Tuesday cast a pall over the semiconductor sector, while Softbank's deal to take control of WeWork provoked some serious thinking about loss-making startups.
Texas, which sells to a broad range of sectors, fell 9.8% in after-hours trading after trimming its fourth-quarter revenue guidance to around 10% below the street’s forecast. It said “most markets had weakened.”
By 6:15 AM ET, Dow futures were down 12.5 points, or 0.1%, while S&P 500 Futures were unchanged and Nasdaq 100 futures were up less than 0.1%.
Another stock in focus this morning is Snap Inc (NYSE:SNAP), which fell 3.4% after the bell despite reporting an improvement in user growth and revenue. Lyft (NASDAQ:LYFT), by contrast, is set to open higher after executives told the WSJ that the company will be profitable a year earlier than originally thought.
Today’s earnings roster is headed by Microsoft, which reports after the bell along with Ford Motor, Equifax, Paypal, eBay and ServiceNow. Early reporters include Anthem, which beat expectations marginally, as well as Caterpillar, Thermo Fisher, Eli Lilly and General Dynamics.
4. Oil tumbles on Russian comments; inventories due
Russia’s Energy Minister Alexander Novak sent crude oil futures lower after ddownplaying suggestions that the so-called OPEC+ group of oil exporters could agree to deeper output cuts when it reviews its current arrangements in December.
The current deal, due to run through March 2020, is now widely seen as not enough to keep the global market in balance, given that the slowing global economy doesn’t need as much oil as though earlier.
Novak said there had been no official proposal to change the deal, but added that it could always be tweaked. The CEO of private oil company Lukoil said there would be no need to adjust the deal until April.
Crude was in bearish mood in any case after signs of another big build in U.S. inventories last week. The American Petroleum Institute reported a 4.5 million-barrel rise in crude stocks, more than twice the amount expected to be confirmed by official government figures due at 10:30 AM ET (1430 GMT).
5. EU to consult on Brexit delay
EU leaders will consult on how to respond to the U.K. government’s request for another extension to the deadline for Brexit, after lawmakers made it impossible for last week’s deal to be enacted before the Oct. 31 deadline.
The EU needs to approve any extension unanimously. There are no signs yet that it will refuse, and the EU parliament said earlier Wednesday it should be approved. There are questions, however, over the length of any extension. The government requested a new deadline of Jan. 31. Some have suggested the bloc set a shorter deadline, in order to raise the pressure on the U.K. to get Brexit done. Those who want to keep Britain in the EU have played for time, in the hope that more scrutiny of Prime Minister Boris Johnson’s deal will ultimately expose decisive weaknesses.
The pound was sharply lower against both the dollar and euro by midday in Europe.