© Reuters. 5 major events in today’s financial market: everyone’s attention!The Fed’s favorite inflation gauge is here
Investing.com — Wall Street’s major stock indexes weakened ahead of the opening bell on cautious sentiment ahead of the release of heavy U.S. inflation data. Nike issued weak guidance, sending its stock price tumbling. UK GDP shrank in the third quarter, and the probability of a recession at the end of the year has increased.
Here are five important things to know about the financial markets on Friday, December 22:
1.All eyes are on you!The Fed’s favorite inflation gaugeAnnouncement coming soon
The United States will later release the November personal consumption expenditures (PCE) price index, the Federal Reserve’s favorite inflation indicator. The data is expected to help investors further understand the inflation situation in the United States.
Economists expect the economy to remain flat for a second straight month, while excluding fluctuations in food and energy costs, it is expected to rise 0.2%.
Previously, the Fed adopted a more dovish tone at its last meeting, igniting investors’ pricing of about 150 basis points of interest rate cuts next year, especially with evidence of aggressive interest rate hikes between March 2022 and July 2023. Finally, price pressures are easing, while the labor market is also cooling.
If there are signs of stalemate in inflation, these interest rate cut expectations may be weakened. However, on Thursday, the United States lowered the PCE price sub-index in the third quarter GDP growth data, indicating that the probability of a downward trend in the monthly data released this time has increased.
2.U.S. stock futures slide before market open，butthis weekThe perimeter is stillExpected to achieve great results again
U.S. stock futures fell before the open on Friday on caution ahead of inflation data, but were still on track for a weekly gain.
The three major stock index futures rose strongly on Thursday and quickly recovered from Wednesday’s decline. The blue-chip index rose more than 300 points or 0.9%, up 1%, and the index dominated by technology stocks rose 1.3%.
However, the three major indexes are still expected to rise for an eighth consecutive week, with the S&P 500 expected to post its first eight consecutive weekly gains since 2017, and the Dow Jones Industrial Average expected to post its first weekly rise since 2019.
On the other hand, Morgan Stanley’s outgoing CEO James Gorman said in an interview with the Financial Times on Friday that financial markets will “take off” once investors are sure that the Federal Reserve has completed raising interest rates.
“As soon as the Fed signals they’re done raising rates, let alone the moment they cut rates for the first time, the market will take off,” he said.
3.Nike tumbles before market opens11%,warnconsumer demandwill continue to weaken
Nike Inc plunged in pre-market trading on Friday after it lowered its annual sales forecast and warned of a weaker revenue outlook in the second half of the year as consumers cautiously spend.
Nike now expects full-year revenue to grow about 1%, down from its previous forecast of mid-single-digit percentage growth. Analysts had expected growth of 3.8%, according to LSEG.
“We are seeing signs of more cautious global consumer behavior,” NIke Chief Financial Officer Matthew Friend said on a conference call after the earnings release.
Recently, Nike has faced pressure from unstable demand, especially in China, the world’s second-largest economy. As economic growth slows, Nike has also stepped up promotions, which can drag down profits.
To this end, Nike announced that it plans to save up to $2 billion in costs within three years. Measures include simplifying product categories, increasing automation and technology applications, and streamlining operations.
4.U.K.economyheading into recession
Revised data on the UK economy released earlier on Friday showed the UK economy shrank between July and September, with the UK economy shrinking by 0.1% in the third quarter, according to the Office for National Statistics.
Meanwhile, second-quarter GDP growth is now estimated to be flat, down from the previous estimate of 0.2% growth.
The official definition of a recession is two consecutive quarters of negative growth, and the performance of the last quarter of this year is expected to become a focus in the future. There are signs that the UK economy is under pressure and the impact of rising interest rates has yet to be fully felt.
5.not afraidAngolasimulatequitOPEC，Oil prices rise
Oil prices rose on Friday despite Angola’s decision to withdraw from OPEC, saying joining the group was not in Angola’s interests. However, the situation in the Red Sea continues to support oil prices.
Some traders expect supply shortages as some oil and shipping companies choose to bypass the Suez Canal, which carries about 12% of global trade. So far this week, U.S. oil and Brent oil have both risen by more than 4% this week, and are expected to rise strongly for the second consecutive week.
On the other hand, Angola decided to withdraw from the Organization of the Petroleum Exporting Countries (OPEC), saying that joining the organization was not conducive to Angola’s interests. OPEC and its allies, including Russia, have been cutting production to boost oil prices, including voluntary production cuts totaling about 2.2 million barrels per day in the first quarter of 2024.
However, Angola has protested against the production cuts, especially since Angola only accounts for a small part of OPEC’s total output. Moreover, Brazil will join OPEC next year, but concerns about OPEC’s ability to maintain unity are also rising.
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Compiler: Liu Chuan
2023-12-22 11:00:39
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