Market Watch: Dow futures contract decreased by 0.1%, while S&P 500 futures rose by 0.3% and Nasdaq 100 futures increased by 0.9%.
Stock futures show mixed openings on Wall Street due to Federal Reserve’s fewer interest rate reductions, Tesla’s shareholder vote on Elon Musk’s $56 billion compensation deal, and Broadcom’s annual guidance for AI-optimized chips.
Federal Reserve plan
The Federal Reserve plans to unveil only one possible interest rate cut in 2024, indicating a hawkish stance from policymakers as borrowing costs remain on hold at over two-decade highs. The rate of price growth, the main focus of the Fed’s tightening cycle, has remained above the 2% target. The Federal Open Market Committee acknowledged that “modest” progress has been made in corralling prices. Financial markets are now pricing in a 56.7% chance that the Fed will ratchet down rates by 25-basis points in September.
Elon Musk Pay
Tesla CEO Elon Musk has announced that shareholders are expected to support his $56 billion pay package and the company’s decision to reincorporate in Texas from Delaware by “wide margins.” The results are expected to be revealed at a meeting at Tesla’s headquarters in Texas on Thursday. Musk’s pay deal was struck down by a Delaware judge earlier this year.
Broadcom Rise
Broadcom has raised its annual revenue guidance for its AI-optimized chips, boosting its shares to $11 billion from $10 billion. The company’s cutting-edge networking processors are used in applications like OpenAI’s ChatGPT chatbot. In Q2, AI product revenue reached $3.1 billion. Broadcom also announced a ten-for-one stock split to make its shares more affordable for retail investors.
Economic Calendar
- 8:30 Initial Jobless Claims
- 8:30 Producer Price Index
- 10:30 EIA Natural Gas Inventory
- 12:00 PM Fed’s Williams Speech
- 1:00 PM Results of $22B, 30-Year Bond Auction
- 4:30 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.