Futures
Futures Slightly Higher Ahead of Key Inflation Data
2024-12-11
In the world of finance, Wednesday witnessed a slight uptick in futures tied to the S&P 500 and the Nasdaq. This came as most megacap stocks showed signs of growth, with all eyes fixed on a crucial inflation reading. This reading, the November consumer price index (CPI), due at 8:30 a.m. ET, holds significant importance as it is among the final major datasets ahead of the Fed's Dec. 17-18 meeting.
Expected Inflation Figures and Their Implications
The report is anticipated to reveal that headline inflation increased by 0.3% on a monthly basis and reached 2.7% on an annual basis in the last month. This figure still surpasses the Fed's 2% target. The core figure, which excludes volatile components like food and energy, is expected to remain steady at 3.3% year-on-year. Since October, the inflation rate has been gradually rising again. As Jochen Stanzl, the chief market analyst at CMC Markets, noted in a note, "an end to this short-term upward trend would be necessary to confirm the expectation of three interest rate cuts in the next six months." The Fed aims to see further progress and does not view the fight against inflation as over. As long as the labor market does not cool down more rapidly, the Fed has the time to continue monitoring the situation.Trader bets, according to CME's FedWatch Tool, currently indicate an over 86% chance of the central bank implementing a 25 basis point cut next week. These bets saw a significant jump following Friday's employment report, which showed an increase in unemployment along with a surge in job growth.Pre-Market Trading and Stock Movements
At 7:04 a.m. ET, Dow E-minis experienced a decline of 38 points, or 0.09%. In contrast, S&P 500 E-minis rose by 5.75 points, or 0.1%, and Nasdaq 100 E-minis increased by 34.5 points, or 0.16%. On the previous session, Wall Street's main indexes ended lower, mainly due to the influence of heavyweight technology stocks. However, the S&P 500 and the Nasdaq were close to record levels. December has started on a generally positive note for U.S. equities, with the S&P 500 and the Nasdaq recording gains in their first week after a strong finish to November.This week, a producer prices reading is also expected on Thursday. During premarket trading, most megacap and growth stocks moved higher. Alphabet, Nvidia, and Tesla each rose by more than 1%. Among other notable movers, GameStop gained 3% after reporting a profit for the third quarter due to cost-saving efforts. General Motors saw a 1.5% increase after the automaker announced on Tuesday that it would end robotaxi development at its majority-owned, money-losing Cruise business. GE Vernova slipped 1.7% as the company's CEO expressed caution about the outlook for its wind sector, despite resuming turbine installations at two offshore wind farms.Department Store's Profit Cut and Market Reaction
Macy's faced a significant setback, slumping 9.3% after the department-store bellwether cut its annual profit forecast. This move had a notable impact on the market, highlighting the sensitivity of different sectors to economic indicators and market trends.In conclusion, the interplay between futures, inflation, and stock movements continues to shape the financial landscape. The upcoming Fed meeting and various economic data releases will play a crucial role in determining the future direction of the markets.