Market Watch:- Dow futures contract increased by 0.1%, while S&P 500 futures dropped by 0.1% and Nasdaq 100 futures fell by 0.1%.
The first-quarter earnings season begins on Friday, with major banks reporting, the UK economy returning to growth, and the crude market expected to end the week lower.
Major bank Earnings
The first quarter earnings season is set to intensify with reports from the U.S. banking sector, including JPMorgan Chase, Citigroup, and Wells Fargo, due later. The focus is on how interest rate changes will affect funding costs and commercial real estate loan holdings. Analysts predict a 5% increase in earnings for S&P 500 companies in Q1.
Large cap stocks outflow
US large cap stocks experienced their largest weekly outflow since December 2022, with $15.8 billion outflows in the week to Wednesday. The week was influenced by a hotter-than-expected consumer price index, oil price hikes, and stronger-than-expected inflation data, with the Dow Jones Industrial Average set to close the week over 1% lower.
UK economy strong
The UK economy is expected to exit recession soon, with output growing for a second consecutive month in February and January’s reading revised higher. The first quarter of 2024 is likely to show some growth, with the three-month average growth rate rising to 0.2% in February. The Bank of England’s cautious tone could reinforce interest rate cuts, but growth in the first half of the year is expected to be tepid.
Economic Calendar
- 8:30 Import/Export Prices
- 10:00 Consumer Sentiment
- 1:00 PM Baker-Hughes Rig Count
- 1:00 PM Fed’s Schmid Speech
- 2:30 PM Fed’s Bostic Speech
- 3:30 PM Fed’s Daly Speech
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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.