U.S. Stock Futures Point Lower as Markets Eye Key Labor Data
U.S. stock futures pointed lower on Tuesday following gains in light pre-holiday trading the day before. On Monday, all three major indices finished higher, with the tech-heavy Nasdaq Composite receiving a notable boost from Big Tech names like Tesla (NASDAQ
) and Apple (NASDAQ
). Trading volumes were muted as equity markets prepared to close for the U.S. Independence Day holiday on Thursday.
This week, investors are focused on key U.S. labor market data, including job openings on Tuesday and the monthly non-farm payrolls report on Friday. These numbers could influence the Federal Reserve’s approach to potential interest rate cuts later this year.
Powell to Speak at ECB Conference in Sintra
Fed Chair Jerome Powell is set to participate in a panel at a European Central Bank conference in Sintra on Tuesday. Markets are keen to see if he will provide any new cues on interest rates. Powell’s comments will serve as a precursor to the publication of minutes from the Fed’s June policy meeting on Wednesday. At that meeting, the Fed’s rate-setting Federal Open Market Committee (FOMC) indicated that it only expects to reduce borrowing costs once this year, down from three in March.
Despite this, traders, encouraged by hopes for a continued cooling in U.S. inflation, are still betting that the Fed will implement roughly two rate cuts in 2024, starting in September, according to CME Group’s (NASDAQ
) closely-monitored FedWatch Tool. Analysts at ING noted, “There has been a tendency from Powell to be a bit more optimistic than the FOMC consensus on disinflation, and we think there are some downside risks for the dollar ahead of today’s speech.”
Federal Prosecutors Awaiting Boeing Decision on Plea Deal
The U.S. Justice Department is waiting for Boeing to accept a plea deal to settle felony fraud charges related to two fatal crashes of its 737 Max planes, according to the Associated Press. Sources familiar with the matter said Boeing has until the end of the week to accept or reject the offer, which includes independent monitoring for compliance with anti-fraud laws.
This proposal follows a Justice Department finding earlier this year that Boeing had misled regulators approving the 737 Max, violating a 2021 agreement that shielded the company from prosecution over deadly crashes in 2018 and 2019 that killed 346 people. Accepting the deal would save Boeing from a potentially bruising courtroom battle but could overshadow its ongoing efforts to move past other safety issues.
Billionaire Barry Diller Eyeing Possible Paramount Bid
Billionaire Barry Diller is considering a bid to take over Paramount Global (NASDAQ
) after his studio, IAC, pulled out of a merger with Skydance Media, the New York Times reported. IAC signed nondisclosure agreements with National Amusements, Paramount’s controlling shareholder, suggesting preliminary steps towards negotiations.
Diller had bid for Paramount in the early 1990s but was outbid by Sumner Redstone. He previously led the studio in the 1970s and 1980s, reviving it through several popular projects. Paramount, the parent company of CBS, MTV, and Nickelodeon, has engaged in sale talks with several potential suitors over the past year, but no deals have materialized so far.
Crude Prices Near Two-Month Highs
Crude prices inched up on Tuesday, holding near two-month highs on expectations for rising fuel demand during the U.S. summer. By 03:20 ET, U.S. crude futures (WTI) had gained 0.1% to $83.42 a barrel, while Brent crude had climbed 0.1% to $86.71 per barrel. Both benchmarks hit their highest levels since the end of April in the previous session.
U.S. gasoline demand is expected to increase as the summer travel season gathers steam due to the Independence Day holiday. Traders will also be watching the latest U.S. crude stockpiles data from the American Petroleum Institute, as well as potential disruptions from Hurricane Beryl on U.S. oil refining and offshore production in the Gulf of Mexico.
Stay tuned for details on next week’s live session with Greg, open to all members. Also, see OP chat for today’s upgrades and downgrades.
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