Market Watch: Stock futures rise on Wall Street amid debates on Federal Reserve interest rate cuts, weaker-than-anticipated jobs report, tentative Boeing labor union deal, and Alimentation Couche Tard’s $38.5 billion takeover offer for 7-Eleven.
Fed rate cut size?
Investors are betting on the Federal Reserve to cut rates by 25-basis points, with 73% of bets on the CME Group’s FedWatch Tool.
The probability of a 50-basis point cut is 27%, following a slight increase in the wake of the jobs data. Fed Governor Christopher Waller remains open-minded about the cuts’ depth and pace.
Boeing deal
Boeing has reached a tentative deal with its largest union, announcing a 25% pay increase. The deal includes a four-year commitment to build a new plane, improved retirement benefits, and increased union input into jet quality. If rejected, workers could stage a walkout.
Seven & i Holdings and Couche-Tard plan
Canada’s Alimentation Couche-Tard remains committed to its takeover bid of Seven & i Holdings, despite the Japanese owner’s rejection of a $38.5 billion preliminary offer.
The company is confident that collaborative discussions will lead to a deal that increases value for Seven & i stakeholders.
Economic Calendar
- 10:00 Wholesale Inventories (Preliminary)
- 3:00 PM Consumer Credit
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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.