Market Watch: Dow futures contract fell 40 points, while S&P 500 futures rose 7 points and Nasdaq 100 futures rose 45 points.
The Federal Reserve maintained rates, hinting at a possible cut next month, with the Bank of England making the decision later.
 Rate cut soonÂ
The US Federal Reserve has lifted its September rate cut confidence, acknowledging recent progress on inflation. The Fed kept its benchmark rate in a range of 5.25% to 5.5%, as it has done over the past year.
Recent data indicates that the Fed’s restrictive policies are working, and a September rate cut of 25 basis points is almost fully priced in. The Fed also acknowledged a cooling in the labor market and is “attentive to the risks to both sides of its dual mandate.
Meta earnings
Meta Platforms, the company that owns and operates Facebook, Instagram, Threads, and WhatsApp, reported strong second-quarter earnings, beating market expectations with a 22% growth.
The company’s Chief Financial Officer, Susan Li, said it was benefiting from healthy global advertising demand and plans to use artificial intelligence to improve targeting, ranking, and delivery systems for digital ads. Meta’s revenue jump topped expense growth and led to a 9-point rise in operating margin to 38%.
Apple’s revenue
Apple’s revenue is expected to rise 3.3% in Q3 compared to the previous year, bouncing back after a 4.3% decline in Q2. Sales of the iPhone, which accounts for nearly half of Apple’s revenue, are expected to have decreased by 2.2% in the three months ended June, a significant improvement from the 10.5% decline in Q2.
Apple’s sales of the iPad, which account for nearly half of its revenue, are expected to have jumped 14.1%, the fastest growth since the holiday quarter of 2022. Apple’s shares have risen nearly 30% in the past three months. The Bank of England is set to make central bank rate decisions later, following the Bank of Japan’s second interest rate hike in 17 years and the US Federal Reserve’s hint at lowering rates in September.
Bank of England to cut?
The Bank of England is set to make its central bank rate decisions later Thursday, following the Bank of Japan’s second interest rate hike in 17 years and the US Federal Reserve’s hint of lowering rates in September. The Bank of England has held its benchmark interest rate at 5.25% for the past year to tackle inflation.
Economic Calendar
- 07:30 AMÂ Challenger Job-Cut Report
- 08:30 AMÂ Initial Jobless Claims
- 08:30 AMÂ Productivity and Costs
- 09:45 AMÂ PMI Manufacturing Final
- 10:00 AMÂ ISM Manufacturing Index
- 10:00 AMÂ Construction Spending
- 10:30 AM EIA Natural Gas Report
- 04:30 PMÂ 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.