(Bloomberg) — Wall Street was set to open stronger as traders bet that inflation data due later this week would provide enough support for the Federal Reserve to continue cutting interest rates in the coming months.
Bloomberg’s most read
Contracts on the S&P 500 and Nasdaq 100 added about 0.5 percent, bucking earlier disappointment over a lack of fresh stimulus from China. Treasury yields also steadied after a sharp rise on Monday as bets on the size of the Fed’s rate cut in November were called off.
“Global risk appetite remains broadly constructive,” said Benoit Anne, chief investment officer at MFS Investment Management. “The fundamental story remains strong, the US labor market is still in good shape. The direction of travel for interest rates will be lower still.”
In premarket trading, Super Micro Computer Inc. rose after shipment data suggested strong demand for its servers, while Honeywell International Inc. won as the Wall Street Journal reported that the industrial company plans to spin off its advanced materials division.
On the downside, U.S.-listed Chinese shares fell sharply after China’s latest pledge to prop up its economy dashed hopes for a new wave of stimulus. That also weighed on Europe’s Stoxx 600 index, with China-exposed names such as luxury firm Kering SA and Burberry Plc bearing the brunt.
Attention now turns to US consumer inflation data, which is expected to slow to 2.3% year-on-year from the previous reading of 2.5%. Traders are pricing in a rate cut of less than a quarter of a point at the Fed’s November meeting, though they still see about 48 basis points of policy easing by the end of the year.
The inflation data is seen as particularly important given the possibility that the ongoing US hurricane season and labor strikes will impact this month’s jobs print.
“The CPI data is probably more important now than in previous months because labor force data will be more cloudy going forward,” said Robert Dishner, senior portfolio manager at Neuberger Berman.
On the corporate front, major US banks kick off earnings season in earnest on Friday, with company guidance for the coming quarters considered key.
“Most investors will now be looking to build an outlook to 2025 and get guidance from the corporate sector on how they think about the earnings picture for next year,” said Shaniel Ramjee, senior investment manager at Pictet Asset Management.
Commodity markets also felt the lack of fresh stimulus from China, with Brent crude futures down around 2%.
Key events this week:
-
The Fed’s Raphael Bostic, Susan Collins, Philip Jefferson and Adriana Kugler speak Tuesday
-
Power minutes, Wednesday
-
The Fed’s Lorie Logan, Raphael Bostic, Austan Goolsbee and Mary Daly speak Wednesday
-
US Initial Jobless Claims, CPI, Thursday
-
The Fed’s John Williams and Thomas Barkin speak Thursday
-
JPMorgan, Wells Fargo kick off earnings season for big Wall Street banks on Friday
-
US PPI, University of Michigan, Consumer Sentiment, Friday
-
The Fed’s Lorie Logan, Austan Goolsbee and Michelle Bowman speak on Friday
Some of the main movements in the markets:
Stocks
-
The Stoxx Europe 600 was down 0.5 percent at 12:47 p.m. London time
-
S&P 500 futures rose 0.4%
-
Nasdaq 100 futures rose 0.5%
-
Dow Jones Industrial Average futures rose 0.2%
-
MSCI Asia Pacific index fell 2.1%
-
MSCI Emerging Markets index fell 2.1%
Coins
-
The Bloomberg Dollar Spot Index was little changed
-
The euro was little changed at $1.0985
-
The Japanese yen rose 0.2 percent to 147.83 per dollar
-
The offshore yuan rose 0.2 percent to 7.0543 per dollar
-
Sterling rose 0.1% to $1.3100
Cryptocurrencies
-
Bitcoin fell 0.7% to $62,587.08
-
Ether was down 0.2% at $2,436.71
BONDS
-
The 10-year Treasury yield was little changed at 4.02%
-
Germany’s 10-year yield was little changed at 2.25%
-
Britain’s 10-year yield fell two basis points to 4.19%
commodities
-
Brent crude fell 2.2% to $79.14 a barrel
-
Spot gold rose 0.3% to $2,651.35 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Sujata Rao and Aya Wagatsuma.
Bloomberg Businessweek’s most read
©2024 Bloomberg LP
#stocks #shrugging #China #firmer #opening #closing #markets