Market Watch: Wall Street is expected to rise on Friday due to the Fed’s preferred inflation gauge, Intel considering restructuring options, and Dell showcasing impressive quarterly results and forecasts.
PCE data ahead
The Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge, is expected to show slight inflation in July, with an annual gain of 2.6%.
Fed Chair Jerome Powell acknowledged recent progress on inflation, indicating a potential rate cut at next month’s policy meeting. However, a strong economy and sticky inflation may provide less impetus for the Fed to cut interest rates.
Intel is exploring restructuring options
Intel is exploring restructuring options, including splitting off its foundry business and halting plans for new factories, amid a sharp slowdown. The chipmaker is in discussions with investment bankers about potential options.
Intel, after suspending dividends and reducing workforce, is considering separating its product design and foundry business, and halting expansion plans to streamline operations.
Dell raise its earning forcast
Dell Technologies has increased its annual revenue and profit forecasts due to increased demand for its AI-optimized servers, with an expected revenue range of $95.5 billion to $98.5 billion.
AI-optimized server demand surged 23% to $3.2 billion in Q2, with revenue rising 9% to $25.03 billion, beating average estimate. Adjusted profit per share was $1.89.
Economic Calendar
- 08:30 AM Personal Income and Outlays
- 09:45 AM Chicago PMI
- 10:00 AM Consumer Sentiment
- 01:00 PM Baker-Hughes Rig Count
- 03:00 PM Farm Prices
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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.