Market Watch: Dow futures contract fell 100 points or 0.3%, while S&P 500 futures dropped 15 points or 0.3%, and Nasdaq 100 futures fell 32 points or 0.2%.
Wall Street futures lower amid weekly jobless claims data release, Apple’s potential AI product charges, and global carry trade impact.
Jobless claims
Wall Street experienced a sharp selloff after Friday’s weak nonfarm payrolls release, leading to a focus on the weekly jobless claims figures.
Economists expect initial claims to total 241,000 last week, a small reduction from the prior week’s 249,000. The number of Americans filing new unemployment benefits increased to an 11-month high, adding to fears of a cooling labor market.
 75% of carry trade removed – JPMorgan
JPMorgan analysts have reported that 75% of the global carry trade, which involves investors borrowing money in low-interest rates and investing in higher-returning assets, has been removed due to the market turmoil.
The move is influenced by factors such as US elections, potential funder repricing, and the rotation to value. Carry baskets have already suffered significant drawdowns following the tech sell-off, and the risk-reward for global carry is low.
Apple is set to launch Apple Intelligence
Apple is set to launch Apple Intelligence, the largest software upgrade for the iPhone, with advanced AI features expected to attract buyers.
Analysts predict that users could be charged up to $20 for these advanced features, as Apple aims to boost its services business, which generated $24.2 billion in the June quarter.
Economic Calendar
- 08:30 AMÂ Jobless Claims
- 10:00 AMÂ Wholesale Inventories (Preliminary)
- 10:30 AMÂ EIA Natural Gas Report
- 01:00 PMÂ Results of $25B, 30-Year Bond Auction
- 03:00 PMÂ Fed’s Barkin Speech
- 04:30 PMÂ Fed Balance Sheet
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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.