Futures drop on caution ahead of inflation data By Reuters
2024-02-13 21:20:19
more 
982

By Johann M Cherian and Ankika Biswas

(Reuters) -U.S. stock index futures fell on Tuesday as investors braced for an inflation print that could threaten to halt the ongoing market exuberance and offer clues on the timeline for interest rate cuts.

Focus is pinned on the trajectory of the consumer price index in January, following a modest revision to inflation in the last quarter of 2023 that left investors broadly relieved.

Economists polled by Reuters expect consumer inflation to rise 2.9% annually in January after 3.4% growth in December. Excluding volatile items like food and energy, prices are forecast to rise 3.7%, easing from a 3.9% increase in December.

"CPI data is likely to trigger some volatility across markets. If the data comes in higher than expected, we suspect an intense downside pressure on stocks," said Joel Kruger, market strategist at LMAX Group.

The Cboe volatility index hit a one-week high, reflecting some anxiety on Wall Street ahead of the data.

At 7:06 a.m. ET, were down 66 points, or 0.17%, were down 21.75 points, or 0.43%, and were down 146.5 points, or 0.82%.

With a March rate cut unlikely against the backdrop of a resilient economy, bets for the first reduction are concentrated around May and June, with the odds for the former at 56%, down from above 95% in early January, the CME FedWatch tool showed.

"Despite the quiet currency market and a recent less dovish repricing of rate expectations, U.S. equities have continued to extend their record run of gains. This is concerning as it looks like investors keep ignoring the signs and keep pushing for accommodative policy at all costs," Kruger added.

Wall Street has been on a rally, with the benchmark gaining in 14 out of the past 15 weeks, the first time since March 1972. The Dow is also trading at a record high level, and on Monday the Nasdaq briefly surpassed its record closing high from November 2021.

Hopes of imminent policy easing this year had kicked off the rally in November 2023, further boosted by signs of healthy corporate performance. Markets also continue to reward megacaps that have led the recent hype around artificial intelligence, as Nvidia (NASDAQ:) briefly surpassed Amazon.com (NASDAQ:) in market value on Monday.

Investors are also cheering robust economic performance, where a Bank of America survey showed they have cut cash levels and boosted equity allocations as they no longer expect an economic recession for the first time since April 2022.

Among premarket movers, JetBlue Airways (NASDAQ:) jumped 14.7% after activist investor Carl Icahn reported a 9.91% stake, adding that the carrier's stock is 'undervalued'.

(NYSE:) shed 7.2% after the cloud solutions provider forecast current-quarter adjusted gross margin below expectations.

Software firm Cadence Design (NASDAQ:) Systems dropped 7.9% following a bleak quarterly sales forecast, while toymaker Hasbro (NASDAQ:) lost 12.3% after a steeper-than-expected drop in holiday-quarter sales and profit.

Tripadvisor jumped 11% as the online travel agency formed a special committee to evaluate proposals that may result in a deal.

Statement:
The content of this article does not represent the views of fxgecko website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!

Related News

您正在访问的是FxGecko网站。 FxGecko互联网及其移动端产品是中国香港特别行政区成立的Hitorank Co.,LIMITED旗下运营和管理的一款面向全球发行的企业资讯査询工具。

您的IP为 中国大陆地区,抱歉的通知您,不能为您提供查询服务,还请谅解。请遵守当地地法律。