Futures
Futures Rise Ahead of Black Friday with Sticky Inflation Concerns
2024-11-29
On Wednesday, the eve of Thanksgiving, Wall Street's main indexes closed lower. This came after data showed signs of sticky inflation, which increased the likelihood that the Federal Reserve would be cautious about interest-rate cuts in 2025. Investors are now closely monitoring stocks of retailers as they prepare to offer steep Black Friday discounts to attract millions of shoppers. This year, the National Retail Federation expects around 85.6 million shoppers to visit stores, a significant increase from 76 million in 2023.
Impact on Retailers
The mega promotional event of Black Friday is a mixed blessing for retailers. As customers rush to get good deals, about three quarters of them actually delay spending in the lead-up to the event. During this promotional period, retailers are selling at a discount, which leads to a smaller profit margin at a time when they are facing rising staff costs. For example, Target (NYSE:TGT) shares rose 0.8%, TJX (NYSE:TJX) climbed 0.6%, Walmart (NYSE:WMT) edged up 0.5%, and Nike (NYSE:NKE) added 0.4% in premarket trading. Susannah Streeter, head of money and markets at Hargreaves Lansdown, pointed out this dilemma.Futures and Index Movements
At 05:35 a.m. ET, Dow E-minis were up 159 points, or 0.35%. The S&P 500 E-minis were up 17.75 points, or 0.30%, and the Nasdaq 100 E-minis were up 79.5 points, or 0.39%. Futures tracking the small-cap Russell 2000 index rose 0.9%. The main indexes were on track for monthly gains, with the benchmark S&P set for its biggest one-month rise since February. An index tracking small-cap companies hit a record high earlier in the week and was poised for its steepest monthly rise in nearly a year. President-elect Donald Trump's victory in the U.S. presidential elections and his Republican Party controlling both houses of Congress provided a boost to equities. Investors were pricing in expectations that Trump's policies on tax cuts, tariffs, and deregulation could spur economic growth and corporate performance. However, concerns about his proposals potentially stoking upside price pressures, slowing the pace of the Fed's monetary policy easing, and weighing on global growth still prevail. Traders expect the central bank to lower borrowing costs by 25 basis points at its December meeting, but see the Fed pausing rate cuts in January and March, according to the CME Group's FedWatch.President Biden's Stance on Tariffs
Speaking about Trump's plan to impose tariffs on the country's top trade partners, President Joe Biden said he hopes the president-elect will rethink his plan. He believes it could "screw up" the United States' relationships with close allies. This shows the complex economic and political dynamics at play.Crypto Stocks and Bitcoin
Crypto stocks were up as Bitcoin, the world's most valuable cryptocurrency, climbed 1.5% and was trading at about $96,000. MicroStrategy rose 4%, MARA Holdings added 2.6%, and Bit Digital advanced 2.9%. Analysts expect stock moves to be influenced by thin volumes after the Thanksgiving holiday on Thursday. This highlights the volatility and uncertainty in the cryptocurrency market.