Market Watch: Dow futures contract remained largely unchanged, while Nasdaq 100 futures added 31 points or 0.1%, and S&P 500 futures increased by 3 points or 0.1%.
US stock futures are slowed as traders await new economic data and Federal Reserve interest rate commentary. Starboard Value takes a $500 million stake in Autodesk. Chinese industrial output growth cooled, indicating economic recovery challenges.
Retail sales data
Wall Street investors are closely monitoring retail sales data for May, expecting a 0.3% increase. The Fed is assessing the impact of higher interest rates on the economy, and will hear from various speakers. The Fed needs more evidence of inflation cooling to its 2% target before lowering borrowing costs. Chicago Fed President Austan Goolsbee expressed relief over price pressures abating in May but wants more months of easing data before slashing rates.
Starboard Autodesk deal
Starboard Value has acquired a $500 million stake in Autodesk, a design-software manufacturer. The investor has held meetings with Autodesk executives to express concerns and suggest changes, including enhancing margins, implementing board changes, and managing a recent accounting investigation. Starboard is considering legal action to request the reopening of the director nomination window and postpone the annual shareholder meeting.
Chinese industrial output
Chinese industrial output slowed in May, with a 5.6% annualized increase, down from 6.7% in April. Property prices also dropped, marking the sharpest decline since 2014. This highlights the challenges faced by Chinese lawmakers in reinvigorating the economy, particularly in exporting goods amid a downturn in the real estate market.
Economic Calendar
- 8:30Â AMÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Empire Fed Manufacturing for June
- 1:00 PM                Fed’s Harker Speaks on Economic Outlook
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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.