Market Watch: Biden’s speech, Ford’s miss, European earnings.

Market Watch: Dow futures contract increased by 20 points, while S&P 500 futures dropped 15 points and Nasdaq 100 futures fell 120 points.

The tech-led selloff is expected to persist, while Ford’s second-quarter profit miss is disappointing. Biden introduces a new generation, while the European earnings season continues.

Biden’s speech

President Joe Biden addressed the nation for the first time since dropping his reelection bid, stating he needed to unite his party and pass the torch to a new generation.

Biden is the oldest president in U.S. history and becomes the first incumbent not to seek reelection since 1968. Vice President Kamala Harris is set to be nominated as the Democratic Party’s candidate, with a two-point lead over Republican Donald Trump.

Ford earnings

Ford’s stock fell over 11% after a profit miss for Q2, despite facing costly quality issues and a weighing EV business. CEO Jim Farley prioritized fixing quality problems, but warranty expenses increased by $800 million.

Legacy automakers have scaled down EV ambitions due to easing demand, hybrids, and competition. Farley believes the remaking of Ford will pay off in the long run.

European earnings

European companies have released their quarterly earnings, with Kering, known for its Gucci brand, reporting a 11% decline in sales.

AstraZeneca raised its sales and profit forecast for 2024, while Sanofi’s profit rose due to Dupixent demand and new launches.

Nestle reported below-expected sales growth, while Unilever and TotalEnergies reported weaker-than-expected underlying sales and a 6% fall in earnings.

Economic Calendar

• 08:30 AM Durable Goods
• 08:30 AM GDP Q2
• 08:30 AM International Trade in Goods (Advance)
• 08:30 AM Initial Jobless Claims
• 08:30 AM Retail Inventories (Advance)
• 08:30 AM Wholesale Inventories (Advance)
• 10:30 AM EIA Natural Gas Report
• 11:00 AM Kansas City Fed Mfg Survey
• 01:00 PM Results of $44B, 7-Year Note Auction
• 04:30 PM Fed Balance Sheet

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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.