Market Watch: Dow futures contract up 0.11%, while S&P 500 futures up 0.15%, and Nasdaq 100 futures up 0.1%.
Wall Street experienced unexpected losses due to softer-than-expected inflation data, with heavyweight technology stocks experiencing steep losses.
Futures losses suggest this trend will continue, while key producer price index data and Q2 earnings season provide more market cues.
Rate cut soon
Markets are increasing bets on a September Federal Reserve interest rate cut, following softer-than-expected consumer price index data.
Traders are pricing in an 82% chance for a 25 basis point cut, up from 64% last week. Producer price index inflation data is set to offer more cues.
US Banks earnings
The second quarter earnings season begins on Friday with major Wall Street banks reporting earnings for the second quarter.
JPMorgan Chase & Co, Wells Fargo & Company, Citigroup, and Bank of New York Mellon will focus on corporate profits amid high interest rates and inflation.
Goldman Sachs, BlackRock, Morgan Stanley, and Bank of America will also report.
Biden’s commitment
US President Joe Biden has confirmed his commitment to run against Donald Trump in the 2024 presidential elections, dismissing concerns over his mental state.
Biden stated he is the “most qualified person” to run, despite calls from Democratic party members for withdrawal.
China’s trade data
China’s trade data showed mixed results in June, with a surplus due to strong exports.
However, imports of key commodities like oil, iron ore, and copper fell, raising concerns about dwindling domestic demand.
Exports are expected to face headwinds in the coming months due to EU tariffs on Chinese industries.
Economic Calendar
- 08:30 AMÂ Producer Price Index – Final Demand
- 10:00 AMÂ Consumer Sentiment
- 01:00 PMÂ Baker-Hughes Rig Count
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Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow, the benchmark and tech-heavytouched record marks last week.
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
Recent data indicating a possible cooling in the U.S. economy have alleviated some persistent inflation concerns, fueling hopes that the Federal Reserve will start to bring interest rates down from more than two-decade highs as soon as September. Along with the Dow,
The durability of the strength on Wall Street will likely be tested by a fresh batch of corporate results this week, including quarterly returns from artificial intelligence darling Nvidia (see below). Durable goods and consumer sentiment data will also be in focus as markets hunt for more evidence that growth is moderating enough to give the Fed justification for rolling out rate cuts this year.
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MFitch Ratings has downgraded China’s credit rating outlook to “Negative” from “Stable” due to concerns over growing public debt and slowing growth in the world’s second-largest economy. The agency affirmed China’s rating at A+, citing increasing risks to China’s public finance outlook. Concerns over slowing economic growth have grown in recent months, with Fitch expecting gross domestic product growth to fall to 4.5% in 2024.
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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.
U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.