Powell’s Remarks
S&P futures (SPX) -0.1%, Dow futures (INDU) -0.1% and Nasdaq 100 futures (INDU) -0.1% were slightly lower.
Earnings wave
The stock market rise may be tested again this week as big-name U.S. corporations report their quarterly results.
McDonald’s Corporation (NYSE:MCD) will report on Monday, and analysts will be curious if cost-conscious customers chose its value meals. Caterpillar (NYSE:CAT), a bellwether for the American industrial sector, will report its fourth-quarter and full-year results.
Results from Walt Disney (NYSE:DIS), Fox, Warner Music Group, and The New York Times Company will also be watched in the coming days.
After last week’s market-moving results from Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL), Big Tech will be in the forefront. This week, Alibaba (NYSE:BABA), Uber (NYSE:UBER), and Arm Holdings (NASDAQ:ARM) will report.
Corporate data are expected to indicate strong economic indications. S&P 500 earnings are expected to rise roughly 10% in 2024, up from 3.6% last year, according to LSEG statistics reported by Reuters.
Powell endorses “prudent” Fed rate decreases.
In an interview with CBS’s “60 Minutes” on Sunday, Federal Reserve Chair Jerome Powell said the robust U.S. economy allows central bankers to be “prudent” when lowering benchmark interest rates.
Powell said he wants to “see the data confirm” that inflation, the main goal of aggressive Fed policy tightening that has raised borrowing prices to more than two-decade highs, is cooling back down to 2% in a “sustainable way.”
His views reflect Fed officials’ caution to avoid reigniting price rises by reducing rates too rapidly. Last week, the Fed kept rates at 5.25% to 5.50% and said they wanted further signs of reducing inflation before cutting rates.
“We have to balance the risk of moving too soon…or too late,” Powell said.
He also declined to say the Fed was close to a “soft landing,” a scenario in which high prices are lowered without causing job losses or a deeper economic collapse. Instead, Powell labeled U.S. economic resilience “historically unusual.”
Boeing warns new fuselage issue might delay 737 deliveries
Boeing shares dropped in premarket U.S. trade on Monday as the embattled planemaker warned that a new issue in some 737 fuselages could delay deliveries “near-term”.
Boeing Commercial Airplanes President Stan Deal informed staff on Sunday that two holes on these models may not have been drilled to specifications.
Deal said the issue is “not an immediate flight safety” concern and all 737s can fly safely. He acknowledged that Boeing must “rework” 50 undelivered planes.
“[T]his is the only course of action given our commitment to deliver perfect airplanes every time,” added Deal. “The days we are setting aside in the 737 program will allow time for our teams to complete the inspections and, if needed, perform the necessary rework.”
Since Alaska Airlines’ 737 Max 9 mid-air door plug breach last month, Boeing aircraft safety has been questioned. Boeing says it still has “much to prove” to authorities and passengers after the catastrophe, thus it has not estimated its 2024 financial year.
World News
China’s Caixin January Services PMI was 52.7, compared to an expected 53.0 and the previous 52.9; the Caixin January Composite PMI was published at 52.5, compared to the previous 52.6.
The U.S. Senate has released a draft of a $118 billion bipartisan package that would deliver $60 billion in military aid to Ukraine, $14 billion to Israel, and $20 billion for border security. The agreement will allow 1.5 million illegal immigrants to enter the US each year while allocating $2.3 billion to “Refugee and Entrant Assistance” and other organizations that traffic them.
Japan’s Services PMI increased to 53.1 in January from 51.5 in December.
Hong Kong’s composite PMI fell to 49.9 in January, from 51.3 in December.
Economic Calendar
9:45 AM S&P Global Composite PMI, Jan-Final
9:45 AM S&P Global Services PMI, Jan-Final
10:00 AM Employment Trends for January
10:00 AM ISM Non-Manufacturing PMI, for January
2:00 PM Senior Loan Officer Opinion Survey on Bank Lending Practices
Other Key Events:
Oppenheimer 2024 Winter Healthcare CEO and Investor Summit, 2/5-2/8
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