US stocks are expected to open lower. FOMC Awaited. March S&P 500 futures are heading low this morning, down -0.88%, after three U.S. indexes closed up Friday. Confidence of evidence of slowing inflation.
Which raised expectations that the Federal Reserve may ease up on the tempo of its tightening cycle. Gains in the consumer goods, technology, and consumer services sectors were the main drivers of three major U.S. stock indices.
US stocks fundamentals in focus
All three of the major U.S. stock indexes finished Friday’s trading day in the green, with the S&P 500 reaching a six-week top, the Dow reaching a 1-1/2-week peak, and the Nasdaq 100 reaching a 4-1/2-month high.
The Fed’s preferred inflation indicator, the Core PCE Price Index from the Commerce Department, came in at +0.3% m/m and +4.4% y/y in December, which is in line with predictions and shows a slowing in consumption and inflation.
Additionally, U.S. personal spending decreased for a second consecutive month in December, coming in at -0.2% m/m. In addition, the University of Michigan Surveys of Consumers revealed that in January, one-year inflation predictions dropped to a 3.9% level that was the lowest in 1-3/4 years.
Meanwhile, the fourth-quarter earnings season is picking up steam with major American tech companies including Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), and Meta Platforms (META) scheduled to release results this week.
Relative to an anticipated decline of 1.6% at the beginning of the year, experts predict that overall S&P 500 earnings would fall by 2.9% year over year in the fourth quarter.
The main events of the upcoming week will be the US Federal Reserve’s interest rate announcement and Fed Chair Jerome Powell’s post-policy meeting news conference. A 25 basis point rate rise on Wednesday has a 98.9% chance of happening, according to U.S. rate futures.
Traders and investors will also be keeping an eye on a slew of economic reports, such as the U.S. CB Consumer Confidence, the Chicago PMI, the S&P/CS HPI Composite – 20 n.s.a., The Employment Cost Index, the ADP Nonfarm Employment Change. T
he Manufacturing PMI, the ISM Manufacturing Employment, the ISM Manufacturing PMI, JOLTs Job Openings, the Crude Oil Inventories, the Initial Jobless Claims
EURO Stoxx
The tech sector saw the worst declines in the Euro Stoxx 50 futures this morning as traders prepared for a significant policy announcement from Federal Reserve members later this week. On Thursday, the Federal Reserve, the European Central Bank, and the Bank of England will all make announcements regarding interest rates; both are anticipated to raise rates by 50 basis points.
In business news, Koninklijke Philips NV (PHIA.A.DX) shares increased by more than 5% following the company’s declaration that it will eliminate 6,000 employees in order to boost profits.
Today saw the preliminary publication of the CPI for Spain, the GDP for Germany, and the consumer confidence index for the Eurozone.
The January CPI for Spain was reported to be +5.8% y/y, higher than the consensus estimate of +4.9% y/y.
In contrast to predictions of 0.0% q/q and +0.8% y/y, the German GDP came in at -0.2% q/q and +0.5% y/y in the fourth quarter.
Consumer confidence in the Eurozone for January came in at -20.9, which was expected.
Today’s Asian stock markets ended in a mixed bag. However, the Nikkei 225 Stock Index (NIK) in Japan and the Shanghai Composite Index (SHCOMP) in China both ended the day up.
