Market Watch: US stock futures remain above the flatline, with new labor market figures potentially impacting Federal Reserve interest rate decisions, President Biden set to block Nippon Steel’s US Steel takeover, and Verizon in advanced talks.
Private payrolls & jobless claims
Investors will receive a deeper look into the US employment market on Thursday, with the ADP National Employment Report and weekly first-time jobless claims numbers due to be published later in the week.
Private payrolls rose less than expected in July, and the number of Americans filing for initial unemployment insurance was in line with forecasts.
Verizon in talks to acquire Frontier Communications
Verizon is in advanced talks to acquire Frontier Communications, a company that offers broadband services in 25 US states. The acquisition is expected to be announced this week.
Frontier Communications’ market value is $7 billion. The deal could boost Verizon’s fiber network.
Nippon Steel-US Steel deal
US President Joe Biden is set to block the proposed $14.9 billion takeover of US Steel by Japan’s Nippon Steel due to national security concerns. A government panel overseeing foreign investment has informed Nippon Steel that these concerns cannot be overcome.
Biden, Kamala Harris, and Donald Trump have previously opposed the deal. Failure to close the deal could put thousands of US union jobs at risk.
Economic Calendar
- 08:30 AM International Trade in Goods and Services
- 10:00 AM Factory Orders
- 10:00 AM Job Openings and Labor Turnover Survey
- 11:00 AM Treasury Buyback Announcement
- 02:00 PM Fed’s Beige Book
- 02:00 PM Treasury Buyback Results
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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.