US stock futures edge lower following a strong Friday rally on Wall Street, driven by an unexpectedly positive jobs report. This week, attention shifts to upcoming inflation data that could provide insight into the Federal Reserve’s interest rate plans. In other news, global mining giant Rio Tinto (NYSE
) confirms its bid for US-based lithium producer Arcadium Lithium, signaling a major move in the electric vehicle supply chain.
Market Recap & Federal Reserve Watch
On Friday, the major indexes posted solid gains as the US economy added significantly more jobs than expected. This fueled optimism that the economy is on stable footing going into Q4, with hopes rising that the Fed may achieve a “soft landing,” controlling inflation without a broader economic downturn. The Dow Jones reached a record close, while the Nasdaq rose 1.2%, and the S&P 500 gained 0.9%.
However, these positive figures also lowered expectations for aggressive rate cuts from the Federal Reserve, with projections now calling for smaller adjustments. The key CPI inflation report on Thursday could further shape these expectations.
Rio Tinto’s Big Move in Lithium
Rio Tinto (NYSE
) has confirmed its approach to acquire Arcadium Lithium, a US-based lithium producer, in a move that could make it a leading global player in EV battery materials. This comes amidst declining lithium prices due to oversupply from China. Arcadium’s market value surged over 24% in premarket trading following the news.
Pfizer Shakeup
Activist investor Starboard Value has taken a $1 billion stake in Pfizer (NYSE
) as it pushes for change within the pharmaceutical giant. Following a slump in post-pandemic performance, Starboard aims to help Pfizer regain momentum, especially after issuing a weak 2024 outlook.
Oil Prices Surge
Oil prices surged again on Monday amid escalating tensions in the Middle East. Last week saw the biggest gains in over a year, driven by fears of a regional conflict following an Israeli missile strike on Hezbollah-backed Iran.
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NDX Levels to Watch
- Upside targets: 20,500, 20,800, 21,000
- Downside levels: 19,850, 19,550, 19,250
Last week, we emphasized the importance of the weekly pivot at 20,255. With price still close to this level and only 65% of the typical weekly range showing, our focus remains the same. A weekly close above or below this level could signal direction, with 20,500, 20,800, and 21,000 as upside targets. If weakness persists, we could see a test of the 19,850 support level.
Notable Economic Data
- Wednesday: FOMC Minutes
- Thursday: CPI
- Friday: PPI
Notable Earnings Reports
- Friday: JPMorgan Chase (JPM), Wells Fargo (WFC)
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