Ahead in Wall Street
Consumer prices and retail sales in February will shed light on Federal Reserve rate reduction. Bitcoin sets record highs, but Wall Street may have another tumultuous week. Start your week with these tips.
US CPI
Investors await Tuesday’s U.S. inflation data to gauge Fed interest rate cuts, with February’s consumer price index expected to rise 0.4% after a faster increase of 0.3% in January.
Fed Chair Jerome Powell indicated that a rate cut may be appropriate this year, but he and his team are not yet prepared. Market observers will also be examining February’s retail sales data, which is expected to rebound 0.8% after a similar decrease a month earlier.
The economic calendar also features updates on industrial production, consumer sentiment and weekly data on initial jobless claims.
Fed officials will be entering the traditional blackout period ahead of their upcoming meeting next week.
Bitcion Rally
Bitcoin has reached an all-time high above $70,000, driven by investor demand for new U.S. spot bitcoin ETFs and global interest rate expectations. Billions of dollars have flowed into ETFs in recent weeks, with the market also bolstered by an expected Ethereum blockchain upgrade and a bitcoin “halving” event in April.
The 2021 bitcoin boom was followed by a “crypto winter” due to bankruptcies and collapses at major crypto firms, leaving millions of investors out of pocket. Despite this, a new wave of money has come in, despite the industry’s maturity. However, central bankers and regulators remain cautious, raising questions about the industry’s potential size and its differences this time.
Oil dip
Oil prices fell 1% on Friday and remained lower for the week due to soft Chinese demand and OPEC+ supply cuts. Brent fell 1.8% and Crude Oil WTI Futures lost 2.5%.
China set an ambitious economic growth target of 5% for 2024, despite analysts arguing for more stimulus. OPEC+ members, including Saudi Arabia and Russia, extended voluntary oil output cuts of 2.2 million barrels per day into the second quarter, providing additional support to the market amid global growth concerns and rising output outside the group. Energy traders are also focusing on potential rate cuts by the Fed and ECB, which could boost oil demand.
Wall Street
Wall Street’s three main indexes ended lower on Friday, ending a turbulent week with Nvidia’s reverse after a recent rally. The S&P 500 lost 0.26%, Nasdaq fell 1.17%, and the Dow Jones Industrial Average dropped 0.93%.
Nvidia’s shares ended the week with gains of over 6%, adding over $1 trillion to its market cap so far this year. Analysts believe investors are locking in profits after a recent market run. However, due to upcoming inflation data, market participants are likely to remain cautious, as the Fed’s upcoming decision on price pressures may not be enough to reassure them.
UK Job Data
The UK is set to release its latest jobs report on Tuesday, with investors and the Bank of England focusing on wage growth amid speculation over a first rate cut. Average hourly pay decelerated to 6.2% in December, the slowest pace in over a year, but not slow enough to convince BoE officials to cut interest rates.
The Eurozone is set to release industrial production data for January, following a significant increase in December, which could indicate positive signs for first quarter GDP growth.
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Investors await Tuesday’s U.S. inflation data to gauge Fed interest rate cuts, with February’s consumer price index expected to rise 0.4% after a faster increase of 0.3% in January.
Fed Chair Jerome Powell indicated that a rate cut may be appropriate this year, but he and his team are not yet prepared. Market observers will also be examining February’s retail sales data, which is expected to rebound 0.8% after a similar decrease a month earlier.
The economic calendar also features updates on industrial production, consumer sentiment and weekly data on initial jobless claims.
Fed officials will be entering the traditional blackout period ahead of their upcoming meeting next week.
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