Title: Stock Futures Rise as Inflation Data Matches Estimates, Fueling Fed Rate Cut Speculation for 2024
Stock futures saw a boost while bond yields plummeted as inflation data aligned with expectations, increasing speculation of potential interest rate cuts by the Federal Reserve in the first half of 2024. The news created positive sentiment in the market, leading to a surge in S&P 500 contracts and propelling the index to close at its highest level since March 2022.
The US bond market experienced significant gains last month, with treasury two-year yields dropping by seven basis points to 4.64%. This decline reflects the market’s anticipation of imminent moves by the Fed to address the potential economic impact of inflation.
Adding to the positive outlook, signs of a slowdown in inflation contributed to the fall in yields. US consumers’ near-term inflation expectations dropped to the lowest level since April 2021, further easing concerns in the market.
However, it wasn’t all good news for tech giants. Google faced a legal defeat against Fortnite maker Epic Games, raising concerns about the app store duopoly it shares with Apple Inc. The ruling has the potential to disrupt the massive revenue stream generated by both companies, with Apple alone making nearly $200 billion annually.
Oracle Corp., a leader in cloud computing, reported a slowdown in quarterly sales growth, prompting investor concern about the company’s expansion efforts. This news resulted in a decline in Oracle’s stock value.
Macy’s Inc. also faced a setback, as it was downgraded to sell by Citigroup Inc. The downgrade was driven by skepticism surrounding a buyout offer from Arkhouse Management and Brigade Capital Management.
On the international front, mergers and acquisitions made headlines. Walt Disney Co. and Reliance Industries Ltd. are preparing to consolidate their media operations in India through a non-binding pact. This collaboration aims to expand their reach and offerings in the rapidly growing Indian market.
Meanwhile, China’s Country Garden Holdings Co. managed to avoid defaulting on yuan bonds after most holders agreed not to demand repayment this week, averting a potentially damaging situation.
As for the upcoming week, key events to watch out for include Eurozone industrial production, US PPI, Federal Reserve policy meeting, European Central Bank policy meeting, Bank of England policy meeting, Swiss National Bank policy meeting, and various economic data releases from China and Eurozone.
In the global market, stock futures for S&P 500, Nasdaq 100, and Dow Jones Industrial Average all experienced growth. The Stoxx Europe 600 remained relatively stable, while the MSCI World index increased.
In the currency market, the Bloomberg Dollar Spot Index declined, while the euro, British pound, and Japanese yen all gained strength against the dollar. Bitcoin and ether also saw slight increases, while the yield on 10-year Treasuries and other European bonds declined.
Amidst these market developments, West Texas Intermediate crude oil prices fell, contrasting with the rise in spot gold prices.
Disclaimer: This news article was produced with the assistance of Bloomberg Automation.