Market Watch: Dow futures contract increased by 0.1%, S&P 500 futures rose by 0.2%, and Nasdaq 100 futures rose by 0.2%.
The Federal Reserve’s policy-setting meeting commences, with investors anticipating increased corporate earnings, especially from the tech sector, with BP’s second-quarter numbers already impressing.
Federal Reserve’s policy meeting
The Federal Reserve is set to start its July policy meeting, with investors eagerly anticipating a September rate cut. The bank is expected to maintain its benchmark overnight interest rate in the 5.25%-5.50% range.
Investors are closely following any policy guidance and the post-meeting press conference with Fed Chairman Jerome Powell. Futures are priced for a quarter-point easing in September, with a small chance of a reduction of 50 basis points.
BP has raised its dividend
BP has raised its dividend after achieving impressive Q2 results, beating profit forecasts. The energy giant reported an underlying profit of $2.76 billion, up from $2.59 billion in 2023.
The company generated $8.1 billion in cash flow, lowering net debt to $22.6 billion. BP raised its dividend by 10% and announced another share buyback worth $1.75 billion for the last quarter.
Microsoft earnings
Microsoft’s quarterly results, including those from Meta, Apple, and Amazon, will highlight the company’s Azure sales.
Azure’s growth remained steady at 31% between April and June, supported by its tie-up with OpenAI, indicating the company’s commitment to artificial intelligence infrastructure.
Economic Calendar
- FOMC meeting begins
- 09:00 AMÂ S&P Corelogic Case-Shiller Home Price Index
- 09:00 AMÂ FHFA House Price Index
- 10:00 AMÂ Consumer Confidence
- 10:00 AMÂ Job Openings and Labor Turnover Survey
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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.