Market Watch: Futures Up After CPI Surge, Walmart Set to Report Earnings.

Market Watch: Dow futures contract increased by 37 points or 0.1%, S&P 500 futures by 5 points or 0.1%, and Nasdaq 100 futures by 34 points or 0.2%.

Stock futures rise, extending Wall Street rally triggered by inflation slowdown data. Federal Reserve may implement interest rate reductions, but more price growth evidence is needed. Walmart’s quarterly results are due, and Chubb’s shares surge after Berkshire’s Berkshire stakes in the insurer.

Bitcoin rise

Bitcoin rose 6.7% in the past 24 hours to $66,159.0, boosted by the U.S. dollar’s slide. However, sentiment towards crypto remained subdued, as year-on-year inflation remains above the Fed’s 2% target level. The token’s trading remains within a $60,000 to $70,000 range established over the past two months, as capital flows and trading activity in spot exchange-traded funds have stagnated.

Chubb rally on Berkshire acquition

Berkshire Hathaway has acquired a $6.72 billion stake in Chubb Ltd, causing Chubb shares to surge to record highs. Berkshire owns 25.9 million shares in the insurer, which it began buying in Q3 2023. Chubb’s earnings in Q1 2024 were strong, with gross premiums exceeding $14 billion and net income rising to $5.23 from $4.54 last year.

Walmart Earnings

Walmart is set to report earnings on Thursday, facing stiff competition from e-commerce giants like Amazon and Temu. Online retail spending in the US surged by 7% between January and April, largely due to strong demand for cheaper merchandise during inflation. Walmart is restocking its inventories at a slower rate than its peers, potentially increasing costs and reducing profit margins.

Economic Calendar

• 8:30 Housing Starts and Permits
• 8:30 Initial Jobless Claims
• 8:30 Philly Fed Business Outlook
• 8:30 Import/Export Prices
• 9:15 Industrial Production
• 10:00 Fed’s Barr Speech
• 10:00 Fed’s Barkin Speech
• 10:30 EIA Natural Gas Inventory
• 10:30 Fed’s Harker Speech
• 12:00 PM Fed’s Mester Speech
• 3:50 PM Fed’s Bostic Speech
• 4:30 PM Fed Balance Sheet

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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.