Market Watch: Dow futures contract increased by 0.1%, while S&P 500 futures rose by 0.1% and Nasdaq 100 futures by 0.1%.
The monthly payrolls report is the main focus, with investors seeking Federal Reserve interest rate cut clues, Nvidia’s short positions increasing, and GameStop’s volatility continuing.
Nvidia’s market capitalization
Nvidia’s stock has trebled over the last year due to increased interest in AI applications. Demand for its AI-optimized chips has risen, leading to a sharp rise in short positions on the company. S3 Partners data shows the notional value of short positions on Nvidia rose to $34.4 billion, representing about 1% of the firm’s market capitalization.
GameStop volatility
GameStop (NYSE:GME) trading is expected to continue due to online stock influencer Keith Gill’s livestream and $116 million bet on the stock. Gill played a key role in the 2021 meme stock rally, which surged nearly 50% on Thursday and gained a further 30% in after-hours trading.
U.S. nonfarm payrolls
The U.S. nonfarm payrolls report is expected to provide insights into the timing of Federal Reserve interest rate cuts. Expectations are for 185,000 jobs added last month, with the unemployment rate remaining below 4% for the 28th consecutive month. However, data suggests an easing of labor market conditions, potentially causing a downside surprise. The Federal Open Market Committee meets next week, but interest rate cuts are not expected.
Economic Calendar
- 8:30 Non-farm payrolls
- 10:00 Wholesale Inventories (Preliminary)
- 12:00 PM Fed’s Cook Speech
- 1:00 PM Baker-Hughes Rig Count
- 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.