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HomeLatest NewsGlobal NewsVolatility Expected: Bank Reports and Federal Reserve's Waller Address Ahead.

Volatility Expected: Bank Reports and Federal Reserve’s Waller Address Ahead.

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Dow Futures contract was down 160 points, or 0.4%, S&P 500 Futures traded 25 points, or 0.5%, down and Nasdaq 100 Futures lost 110 points, or 0.7%.

Fed’s Waller to speak

Traders will also be concentrating on a speech by Federal Reserve Governor Christopher Waller later on Tuesday that might give insights into how the Fed expects to approach policy decisions in the coming months.

Despite issuing a prediction for interest rates that was more dovish than past estimates in December, numerous Fed members have pushed back against market anticipation that they will begin to lower borrowing costs as soon as March. Policymakers have instead emphasized that they would want to see more evidence that the rate of inflation in the U.S. is slowly cooling down to their stated 2% objective.

Markets will certainly be keen for Waller to clarify his own estimates for price increases and rates when he gives comments at the Brookings Institution in Washington, D.C. at 11:00 ET (16:00 GMT).

Typically a more hawkish voice at the Fed, Waller stated in November that he was “increasingly confident” that policy was well-positioned to both “slow the economy and get inflation back to 2%.” But he highlighted that there was “no reason” to imply that the U.S. central bank will hold rates at more than two-decade highs should pricing pressures continue to relax over “the next three to five months.”

Musk seeks for greater Tesla stake

Elon Musk has indicated that he would be “uncomfortable” participating in Tesla’s development of artificial intelligence and robots unless he had roughly twice his investment in the electric automaker.

Musk, believed to be the world’s richest man by Forbes, stated in a post on his social media platform X that he would aim to achieve roughly 25% voting control of Tesla.

He noted that this move, which would almost treble his present shares in the firm, would allow him to be “influential, but not so much that I can’t be overturned.” Musk noted that, should his share not rise, he would want to create things “outside of Tesla.”

The internet mogul has long sponsored Tesla’s development of “Full Self-Driving” software and prototype humanoid robots, but much of the firm’ income still stems from its automobile operations.

Musk presently controls around 13% of the corporation since he sold a piece of his ownership in 2022 to help fund his purchase of Twitter, which was eventually renamed X.

Trump wins Iowa caucuses in landslide

Donald Trump secured a crucial victory in the Iowa caucuses on Monday, all but securing his position as the front-runner in the battle to earn the 2024 Republican presidential nominee.

According to the Associated Press, the former president won around a 30-point win, significantly beyond his closest rivals: Florida Gov. Ron DeSantis and ex-U.N. Ambassador Nikki Haley. The AP called the outcome within a half-hour after the caucuses opened, emphasizing Trump’s dominance on the night.

Turnout in the first major Republican nominating contest of the year was lower than levels recorded in the last round of GOP caucuses in 2016, partially due to participants facing very cold weather and risky driving conditions.

But the victory still provides Trump a significant burst of momentum heading into the first Republican primary in New Hampshire later this month. The competition confronting the former president has also shrunk — biotech entrepreneur Vivek Ramaswamy halted his candidacy and endorsed Trump.

Oil rising amid profit-taking, Middle East turmoil

Oil prices were up on Tuesday, as traders highlighted that conflict in the Middle East has not significantly impacted oil supplies.

By 05:29 ET, the U.S. crude futures were up 0.6% at $73.46 a barrel, while the Brent contract rose 1.2% to trade at $79.14 per barrel.

Signs that recent attacks on cargo boats by Iran-backed Houthi rebels in Yemen — and retaliatory strikes by the U.S. and U.K. — were not denting oil supply pushed on some profit-taking on Monday, Reuters reported. However, volumes were reduced owing to the U.S. market vacation.

The delayed start to the U.S. trading week will mean that official inventory data from the Energy Information Administration will be moved back by one day to Thursday, while industry data from the American Petroleum Institute is due to arrive on Wednesday.

Economic Calendar

7:45 AM ICSC Weekly Retail Sales
8:30 AM Empire Manufacturing for January
11:00 AM Fed’s Waller Speaks on Economic Outlook and Monetary Policy

Other Key Events:

National Retail Federation Retail Show, 1/14-1/16, in New York
Needham 26th Annual Growth Conference, 1/16-1/19, in New York
China Q4 GDP, December Retail Sales, and Industrial Output data

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