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Futures

U.S. Stock Futures Signal Another Day of Losses Amid Fed's Stance

2024-11-15

On Friday, U.S. stock futures were indicating another day of losses as investors digested the message from Fed Chair Jerome Powell. Powell's remarks suggested that the central bank might not be overly aggressive in pursuing rate cuts. This development has had a significant impact on the market, with various indices showing declines. The Dow Jones Industrial Average futures fell by 204 points, or 0.5%, reaching 43697. The S&P 500 futures dropped 38 points, or 0.6%, settling at 5940. And the Nasdaq-100 futures decreased 188 points, or 0.9%, standing at 20824.

Thursday's Market Performance

On Thursday, the Dow Jones Industrial Average witnessed a decline of 207 points, or 0.47%, settling at 43751. The S&P 500 also experienced a setback, falling 36 points, or 0.6%, to 5949. Additionally, the Nasdaq Composite dropped 123 points, or 0.64%, reaching 19108. These figures highlight the volatility and uncertainty in the market.

Analysis of Fed's Stance

Powell's statement on Thursday that the Fed would approach rate decisions "carefully" due to the economy's strength has sparked much discussion. Analysts at DWS Investment have raised questions about whether this was based solely on the latest incoming macro data or if it was a precautionary statement ahead of January 20th. This ambiguity has added to the market's unease and has led investors to closely monitor economic indicators and corporate earnings.

Highlight of Friday's Economics Calendar

Retail sales data is set to be the highlight of Friday's economic calendar. Investors are eagerly awaiting these figures as they provide insights into the health of the consumer sector. Additionally, Nvidia's results next week are also expected to have a significant impact on the market. The anticipation surrounding these events has added to the market's volatility.

Impact of 13-F Filings

The release of 13-F filings of major investors has also been moving markets. Domino's Pizza, for instance, saw a significant jump of 8% after Warren Buffett's Berkshire Hathaway disclosed that it had bought stock in the pizza chain. Such filings often provide clues about the investment strategies of major players and can have a ripple effect on the market.In conclusion, the current market situation is characterized by uncertainty and volatility. Investors are closely watching economic data, corporate earnings, and Fed policy decisions as they navigate these challenging times. The performance of various indices and individual stocks will continue to be closely monitored as the market unfolds.

After a negative session on Wall Street, futures experienced significant losses. The previously witnessed risk-on rally from last week began to cool, and investors started to second-guess their bets on a December rate cut. This uncertainty was further exacerbated by the long-term outlook for inflation in the face of a potential second Donald Trump presidency. Trump is widely expected to implement more inflationary policies, adding to the complexity of the economic landscape.

Key Factors Influencing Futures

Fed's Stance and Data

Fed Chair Jerome Powell's warning on Thursday played a crucial role. He emphasized that the strength of the U.S. economy would allow the Fed to take its time in deciding on interest rate cuts. While painting a positive picture of the economy, Powell also flagged caution over sticky inflation. This was followed by data showing that producer price index inflation grew more than expected in October, preceded by a consumer price index print that indicated inflation remained sticky. The combination of Powell's comments and the data led traders to sharply pare their bets on a December rate cut. CME Fedwatch showed that traders were pricing in a 51.7% chance of rates remaining unchanged and a 48.3% chance of a cut.

Trump's Policies and Their Impact

Trump's protectionist stance on trade and immigration is expected to keep inflation underpinned in the coming years. This has added to the uncertainty surrounding the long-term outlook for rates. As a result, Wall Street fell from record highs on this notion, while the dollar and Treasury yields rose sharply.

Aftermarket Movers

Among major aftermarket movers, Applied Materials Inc (NASDAQ:AMAT) fell nearly 6% after its quarterly earnings missed some street expectations. Slowing revenue from China was a key point of contention. On the other hand, Domino's Pizza Inc (NYSE:DPZ) surged over 9% after Berkshire Hathaway (NYSE:BRKa) disclosed a stake in the firm. Pool Corporation (NASDAQ:POOL) also rose 5.6% after Berkshire disclosed a stake. These movements highlight the diverse reactions of different companies in the market.