Investors will have a lot to consider this week as they analyze economic indicators such as US nonfarm payrolls, wage growth, and inflation, as well as Eurozone inflation numbers and central bank commentary, all of which could impact policy decisions and market sentiment.
Federal Reserve Chair Jerome Powell warned that inflation and economic growth remain too high and interest rates may continue to rise and remain restrictive for longer, while U.S. stocks rebounded and European markets closed slightly higher. Meanwhile, U.S. Trade Representative Katherine Tai highlighted China's dominance in rare earth metals and the vulnerability of U.S. supply chains. Grocery delivery company Instacart filed paperwork for an IPO, and upcoming PCE and jobs data will provide insights into the Fed's rate decisions. Powell's ambiguous remarks at the Jackson Hole symposium led markets to focus on the prospect of a stronger economy rather than interest rate warnings.
Concerns of a stock market crash are growing as economists await the release of the second-quarter GDP report, which could provide insight into the impact of the Federal Reserve's rate-hike campaign and future monetary policy changes. The report may have a significant effect on equity markets, which have been sensitive to economic data releases this year.
Stock markets showed signs of improvement last week, fueled by hopes of a Goldilocks economic scenario, despite downward revisions in Q2 GDP growth and a slowdown in housing prices, while robust hiring and a decline in wage growth raised concerns about a cooling job market. The strength of U.S. consumers and the moderation of the Consumer Confidence index are factors that could influence the Federal Reserve's decisions on inflation, with investors advised to rely on trustworthy data and analysis. Noteworthy upcoming earnings and dividend announcements include Zscaler, Gitlab, GameStop, C3ai, American Eagle, DocuSign, and Kroger. Key economic reports this week will focus on Factory Orders, ISM Services PMI, and Q2 Non-Farm Productivity and Unit Labor Costs.
Asia-Pacific markets are expected to have a mixed start to the week as investors await key data from Australia and China, while in the US, the unemployment rate rose to 3.8% in August and traders are betting that the Federal Reserve may not raise rates further this year. Additionally, the highly anticipated IPO of Softbank-backed Arm is expected to arrive later in the month.
Summary: European markets are poised for a positive start to the week, influenced by the positive trade in the Asia-Pacific region, while investors keep an eye on German trade balance data and a speech by Christine Lagarde, the President of the European Central Bank. Additionally, Fidelity's China fund is on track to outperform its peers for the second year in a row, Arm aims for a listing price between $47 and $51 per share in its IPO, and the US Department of Labor reports a rise in unemployment and lower-than-expected wage growth in August.
U.S. investors are eagerly anticipating several upcoming IPOs in the coming months, including Arm Holdings, Instacart, Klaviyo, and VNG, as they hope to capitalize on the recent rally in equity markets.
Oil prices surge to the highest level in 10 months as Saudi Arabia and Russia extend production cuts, raising concerns about inflation and higher interest rates, while the resilient U.S. economy strengthens prospects for interest rate hikes; tensions escalate in the auto sector as contract negotiations with major automakers continue; GameStop CEO Ryan Cohen faces scrutiny from the SEC over stock trades; Apple's market value plummets due to concerns over China's ban on public workers using foreign-branded devices; semiconductor stocks weaken amid export restrictions on China; energy sector excels while industrials and utilities lag; upcoming key economic data to watch includes inflation rate, Producer Price Index, retail sales figures, and Michigan Consumer Sentiment data.
This week's economic reports, including the Consumer Price Index, Retail Sales, and Consumer Sentiment Index, will provide crucial information for investors and may influence the Federal Reserve's interest rate decision.
Chip designer Arm plans to complete its IPO this week, which will test investor interest in new issues, with other tech companies such as Instacart and Klaviyo also waiting to go public. The IPO is expected to value Arm at $50.2 billion to $54.5 billion, and it has garnered interest from tech giants Alphabet, AMD, Apple, and Nvidia. However, Arm is a mature, slow-growth company, and its success will be a key indicator for the broader IPO market.
European stock markets are expected to open higher on Tuesday as investors await economic data, including U.S. inflation figures and the European Central Bank's rate decision, while Arm IPO's price could potentially surpass $51 per share. Meanwhile, tech investor Paul Meeks plans to buy tech stocks once the market correction subsides, and Federal Reserve officials are reportedly feeling less urgency for another rate hike. HSBC has also named its "must see stocks" in the UK.
Uncertainty in various sectors, including potential strikes, government shutdowns, geopolitical tensions, and the question of future Federal Reserve interest rate hikes, is causing markets to lack conviction, but this week's inflation readings could provide direction for the markets. If inflation comes in below expectations, it may signal that the Fed will not hike rates further, while stronger-than-expected inflation could lead to more rate hikes and market volatility. Additionally, increasing energy prices and the potential strike by the United Auto Workers union add to the uncertainty.
Stocks finished mixed on Wednesday as investors awaited consumer inflation data that could impact the Federal Reserve's future policy decisions. The Dow Jones fell 0.2%, the S&P 500 increased 0.1%, and the Nasdaq Composite climbed 0.3% after a previous decline. The Consumer Price Index showed a higher-than-expected increase in inflation, driven by rising energy prices, which could influence the Fed's decision on interest rates. The market also had its eyes on the Arm IPO and developments involving Apple and China. Meanwhile, the EU launched an investigation into China's subsidies for EV makers.
Stock futures point to lower opens after a strong rally, while oil remains above $90 per barrel; Adobe sees price target hikes but stock is down; United Auto Workers goes on strike; Arm's IPO success benefits banks; Instacart raises proposed price range for IPO; DoorDash transfers stock listing to Nasdaq; HSBC initiates coverage on Microsoft, Oracle, and Salesforce; China's retail sales exceed expectations; Estee Lauder stock rises.
Gas prices drive up US inflation rate, reaching 3.7% in August, while excluding volatile components shows a favorable trend in core inflation; Tesla rallies following an upgrade by Morgan Stanley, Qualcomm secures a deal with Apple, and ARM Holdings PLC debuts with the largest IPO of the year; United Auto Workers strike against Detroit automakers; upcoming Federal Open Market Committee meeting and corporate earnings reports are in focus for the week ahead.
Investors are focused on Jerome Powell and the Federal Reserve's upcoming policy decision, as well as earnings reports from FedEx and the impact of the United Auto Workers strike on companies like Stellantis, GM, and Ford.
Concerns over demand in the global chip sector, as well as strikes at major automaker factories, are weighing on sentiment in Asian markets, while the Bank of Japan's policy meeting and central bank decisions in the US and UK will be closely watched this week.
The Federal Reserve's economic projections will be closely watched for hints on the path of interest rates, with expectations that the dot plot for 2024 may be more cautious due to uncertainty and potential wild cards. Arm Holdings' successful IPO has injected optimism into the IPO market, while the United Auto Workers' strike continues to garner support from President Biden. Turkish President Erdogan has called on Tesla CEO Elon Musk to build a factory in Turkey.
The IPO market shows signs of revival with the success of Instacart and Arm IPOs, indicating that investors still have an appetite for stocks.
Stocks slip as investors await the Federal Reserve's policy meeting and the start of Instacart's IPO trading, with focus on interest rates and inflation.
The upcoming U.S. Federal Reserve meeting is generating less attention than usual, indicating that the Fed's job of pursuing maximum employment and price stability is seen as successful, with labor market data and inflation trends supporting this view.
Investors are more focused on the release of new forecasts from the Federal Reserve, which will reveal their views on the prospect of an economic "soft landing" and the rate environment that will accompany it.
The Federal Reserve's decision to maintain interest rates and raise its long-term forecast for the Federal Funds Rate surprised many market participants, causing a slight pullback in the stock and cryptocurrency markets while highlighting the need for investors to focus on the actual health and viability of companies and the utility of the crypto ecosystem. Additionally, the article speculates on the impact of the U.S. Securities and Exchange Commission's ruling on Bitcoin spot ETF applications and the potential for cryptocurrency to become a mainstream alternative investment.
