OPENING CALL
Stock futures wavered on Monday ahead of a busy week filled with earnings, a policy meeting of the Federal Reserve, and the monthly jobs report.
Around 100 S&P 500 companies are due to report earnings this week, including Apple, Starbucks, Boeing, Microsoft and General Motors. The results should offer clues as to whether stronger consumer spending will continue to bolster the economy.
The Fed is expected to keep interest rates steady this week, but investors will parse comments from Jerome Powell for indications of future cuts. Data on the number of jobs added in January are due Friday.
Overseas
Mainland Chinese shares fell after a Hong Kong court ordered the liquidation of property developer Evergrande . The Hang Seng Index rose.
Premarket Movers
Boeing's 737 MAX 9 jet resumed service. Shares were up 0.3%. The stock has fallen about 17% since the grounding.
Philips took a $394 million charge as part of a U.S. settlement over ventilators, and reported a smaller-than-expected quarterly profit. U.S.-listed shares fell 6.1%.
SoFi is forecast by analysts to report break-even fourth-quarter earnings on revenue of $572 million. The company previously has said it expects to report its first profit under generally accepted accounting principles in the last three months of 2023. The stock rose 5% ahead of the report.
WillScot Mobile Mini is nearing a $3 billion-plus deal to acquire McGrath RentCorp, WSJ reported. WillScot Mobile fell 0.7% and McGrath RentCorp rose 5.8%.
Economic Insight
Inflation has come down a long way from its 2022 highs, especially looking at the PCE measure, but March might be a bit early for the Fed to start cutting interest rates, Pimco said.
"With non-market prices driving the relative good news in PCE, while CPI is still running hotter, the inflation optics of a March rate cut may still be challenging," it said ahead of the Fed's meeting this week.
This, coupled with a surprisingly robust economy, and central bankers' historical tendency to cut with a delay, suggests that while a March cut remains possible, "waiting a bit longer may be the more realistic timing."
Watch For:
Texas Manufacturing Outlook Survey for January; Earnings from SoFi Technologies, Whirlpool, Nucor, Super Micro Computer, F5, Cleveland-Cliffs
Today's Top Headlines/Must Reads:
- Plummeting Inflation Raises New Risk for Fed: Rising Real Interest Rates
- Logistics-Tech Startups Face Uncertain Future as Freight Slump Continues
- U.S. Oil Drillers Are Going Electric-and Hitting Speed Bumps
MARKET WRAPS
Forex:
The dollar traded weaker but if inflation numbers make a U-turn and interfere with the Fed's plan to cut rates, the currency would see higher demand, Swissquote Bank said.
"While everyone expects the dollar to soften moving forward, there are a few scenarios that could lead to a stronger dollar."
The dollar could also gain if other major economies perform even more poorly than they are expected to--because faltering economies would require faster rate cuts outside the U.S. and lead to a stronger dollar, Swissquote added.
ING said the dollar has been the strongest performer across the G10 and emerging market currency blocs so far this year and this is probably down to U.S. growth holding up well.
It added that 103.00-104.00 could well be this week's range for the DXY dollar index.
Energy:
Oil prices slipped following earlier gains.
Over the weekend a drone strike launched by Iran-backed militia killed U.S. service members in Jordan.
The death of U.S. personnel "marks a critical inflection point in the ongoing conflict in the Middle East and raises a specter of a more substantial U.S. involvement in the war," RBC Capital Markets said.
"A more direct confrontation with Iran raises the specter of regional energy supply disruptions."
Metals:
Copper and aluminum prices were weaker as the dollar held steady after strong U.S. business activity and ahead of Wednesday's Fed decision.
Meanwhile, gold was almost 1% higher on rising geopolitical tensions in the Middle East and prices could be headed upward , technical analysis of volatility trends suggests.
The metal faces a possible bullish volatility breakout scenario as long as key medium-term pivotal support at $2,000/oz holds, Oanda said.
TODAY'S TOP HEADLINES
Tesla's Recall Fix for Autopilot Irritates Drivers, Disappoints Safety Advocates
Tesla owner Larry Pecan used to relish turning on Autopilot during his traffic-packed commutes in Miami. Now, the driver-assist system is one of his least favorite parts of his Model 3.
In December, Tesla initiated a recall of about two million vehicles-nearly all the cars it has sold so far in the U.S.-to update the Autopilot software and install new safeguards to prevent driver misuse.
Amazon Is Now Charging Prime Members Extra for Ad-Free Streaming. For Some, That's a Deal Breaker.
Andrew Scott Grace says he is perfectly happy paying $15 a month to get free shipping for all his Amazon orders and have access to the Prime Video streaming service, which he watches frequently.
He draws the line at having to pay $3 more.
The S&P 500 Rallied to Records on the Back of Just One Sector
The S&P 500 is back at record levels for the first time in two years. Information technology is the only one of the index's 11 sectors that can say the same.
Home to the likes of Microsoft, Apple and Nvidia, the tech sector is riding the mania over artificial intelligence and has propelled the broader market to a record close in five of the last six trading sessions. The S&P 500 is up 2.5% to start 2024, while the tech segment has risen 5.9%.
Houthi Attacks Disrupt Shipping, Draw U.S. Into Direct Conflict
Yemen's Houthi rebels are carrying out audacious attacks to disrupt global commerce and draw the U.S. military into direct conflict, using Israel's war in Gaza to transform themselves from a marginal player among Iran-aligned forces into one of the Middle East's most formidable militant groups.
On Saturday, a day after one of the most significant attacks yet by the Houthis on an oil tanker, the vessel's operator said it was continuing to assess carefully the risks involved in any voyage. The Marlin Luanda, sailing on behalf of trading giant Trafigura Group, was struck Friday by a missile in the Gulf of Aden, causing a fire to break out in one cargo tank. It was eventually put out.
South Carolina Turned the Tide for Biden. Haley Hopes for Same Magic in Home State.
COLUMBIA, S.C.-South Carolina gave President Biden political salvation four years ago, a feat Nikki Haley aims to match this year.
Biden and Haley, the former South Carolina governor, spent the weekend campaigning in the Palmetto State ahead of coming primaries. Biden is seeking to draw Black voters in the state's Feb. 3 Democratic primary, where he faces minor competition. The Feb. 24 GOP contest could serve as a tipping point for Haley, who has never lost an election in her home state but is confronting a make-or-break moment against former President Donald Trump.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Celestica 4Q
Valeo Pharma 4Q
Economic Indicators (ET):
Nothing scheduled
Stocks to Watch:
Mithaq Capital Buys 6,600 Common Shares of Aimia at Average Price of $3.30 a Share
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Sulliden Mining Capital:Announces Appointments of Peter Michel as Chief Fincl Officer and Peter Hooper as Chair of the Bd, Effective Immediately
Expected Major Events for Monday
00:01/UK: Dec Zoopla House Price Index
00:01/UK: Jan CBI Growth Indicator and Service Sector Survey
09:00/ITA: Dec Foreign Trade non-EU
15:30/US: Jan Texas Manufacturing Outlook Survey
23:30/JPN: Dec Labour Force Survey
23:50/JPN: Jan Provisional Trade Statistics for 1st 10 days of Month
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
Alexandria Real Estate Equities Inc (ARE) is expected to report $0.83 for 4Q.
Alliance Resource Partners LP (ARLP) is expected to report $1.02 for 4Q.
Auburn National Bancorporation Inc (AUBN) is expected to report for 4Q.
Bank Of Marin Bancorp (BMRC) is expected to report $0.32 for 4Q.
Bank7 Corp (BSVN,GMAR.XX) is expected to report $0.09 for 4Q.
Cadence Bank (CADE) is expected to report for 4Q.
Calix (CALX) is expected to report $0.14 for 4Q.
Capital Southwest Corp (CSWC) is expected to report $0.65 for 3Q.
Celestica (CLS,CLS.T) is expected to report $0.75 for 4Q.
Coda Octopus Group Inc (CODA) is expected to report for 4Q.
Crane Co (CR) is expected to report for 4Q.
Dynex Capital (DX) is expected to report for 4Q.
Equity Lifestyle Properties Inc (ELS) is expected to report for 4Q.
F5 Inc (FFIV) is expected to report $2.10 for 1Q.
First Bancorp NC (FBNC) is expected to report $0.65 for 4Q.
Five Star Bancorp (FSBC) is expected to report for 4Q.
Franklin Financial Services Corp (FRAF) is expected to report for 4Q.
Franklin Resources Inc (BEN) is expected to report $0.48 for 1Q.
Graco Inc (GGG) is expected to report $0.78 for 4Q.
Harmonic (HLIT) is expected to report $0.04 for 4Q.
Hawthorn Bancshares (HWBK) is expected to report for 4Q.
Heartland Financial USA Inc (HTLF) is expected to report $0.97 for 4Q.
Helmerich & Payne Inc (HP) is expected to report $0.73 for 1Q.
HomeStreet Inc (HMST) is expected to report $0.02 for 4Q.
Li-Cycle Holdings Corp (LICY) is expected to report for 4Q.
Luther Burbank Corp (LBC) is expected to report $0.06 for 4Q.
Merchants Bancorp (MBIN) is expected to report $1.44 for 4Q.
PACCAR Inc (PCAR) is expected to report $2.13 for 4Q.
Pacific Premier Bancorp Inc (PPBI) is expected to report $0.45 for 4Q.
Penns Woods Bancorp (PWOD) is expected to report for 4Q.
Ponce Financial Group Inc (PDLB) is expected to report for 4Q.
PotlatchDeltic Corp (PCH) is expected to report $-0.02 for 4Q.
(MORE TO FOLLOW) Dow Jones Newswires
01-29-24 0611ET
