Market Watch: Wall Street is expected to start higher on Thursday, despite potential challenges from US retail sales data, Cisco’s restructuring plan, and the UK’s second-quarter economic growth.
U.S. data
The US economic data continues, with investors awaiting clues on the Federal Reserve’s likely interest cuts.
Mild inflation readings have confirmed the Fed’s intention to lower borrowing costs in September, but debate continues over the size of the cut.
The estimated chance of a 50 basis point cut fell to 36%. The data includes jobless claims, manufacturing index, and July retail sales.
Cisco Earning
Cisco Systems’ stock rose after the company reported better-than-expected fourth-quarter earnings and announced a restructuring plan.
The company reported revenue of $13.64 billion, with adjusted profit per share of 87 cents. Cisco plans to cut 7% of its global workforce, incurring a pretax charge of up to $1 billion.
UK economy grew
The UK economy grew 0.6% in Q2, continuing a cautious recession rebound.
However, economic growth remained flat in June, with industrial and manufacturing production falling sharply on an annual basis.
The Bank of England’s next meeting’s decision on interest rate reduction remains uncertain.
Economic Calendar
- 08:30 AM Initial Jobless Claims
- 08:30 AM Retail Sales
- 08:30 AM Philadelphia Fed Manufacturing Index
- 08:30 AM Empire State Mfg Index
- 08:30 AM Import/Export Prices
- 09:10 AM Fed’s Musalem Speech
- 09:15 AM Industrial Production
- 10:00 AM Business Inventories
- 10:00 AM Housing Market Index
- 10:30 AM EIA Natural Gas Report
- 01:10 PM Fed’s Harker Speech
- 04:00 PM Treasury International Capital
- 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.