Market Watch: Dow futures contract fell by 0.2%, S&P 500 futures by 0.8%, and Nasdaq 100 futures by 1.3%.
Tech stocks are expected to drop sharply at U.S. open due to ASML’s disappointing guidance and Taiwan concerns, while Amazon’s Prime Day may benefit, and UK inflation shows strength.
TSMC weakens after Trump’s comments
Donald Trump has criticized Taiwan for not providing the US with defense equipment, citing its role as the largest supplier of defense equipment in the US.
This has led to Taiwan Semiconductor Manufacturing’s stock falling sharply, with the company being a key point of focus for China. Taiwan is a key part of the global supply chain for technology, with a majority of semiconductors being manufactured in the country.
Amazon’s Prime Day set
Amazon’s annual Prime Day shopping event is expected to see a 10.5% increase in customer spending, with shoppers expected to spend around $14 billion.
Amazon has turned July into an important component of its annual results, accounting for 1% to 2% of its net global sales. Last year, shoppers spent $12.7 billion during Prime Day.
UK interest rate cuts are on hold
UK interest rate cuts are on hold due to steady inflation and strong core CPI. Consumer prices rose 0.1% in June, a 2.0% annual increase, defying forecasts of a slight fall.
Analysts predict a one in three chance of a rate cut at the Bank of England’s next meeting in August, down from almost 50-50 before the inflation data.
Economic Calendar
- 7:00 AMÂ MBA Mortgage Applications
- 8:30 AMÂ Housing Starts and Permits
- 9:00 AMÂ Fed’s Barkin Speech
- 9:15 AMÂ Industrial Production
- 9:35 AM Fed’s Waller Speech
- 10:00 AMÂ Atlanta Fed’s Business Inflation Expectations
- 10:30 AMÂ EIA Petroleum Inventories
- 1:00 PMÂ Results of $13B, 20-Year Bond Auction
- 2:00 PMÂ Fed’s Beige Book
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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.