Economy
US Stock Futures Slide On Global Growth Worries — But Analyst Tells Why Investors Should Be Bullish For 2nd Half Of Year
A potential market reversal is looming in the U.S. as index futures indicate a lower open on Friday. Global markets are experiencing negative cues, with Asian markets slumping due to growth concerns and European markets extending losses for a fifth consecutive session. Energy prices are also on the decline. In the absence of significant corporate news, traders are likely to focus on Main Street data, including business activity reports, and scheduled speeches from the Federal Reserve.Key Highlights From Thursday’s Trading:Stocks closed Thursday’s session mostly higher, with weak data suggesting that the Federal Reserve may lean towards a dovish stance at the upcoming July rate-setting meeting.Jobless claims rose for the third consecutive week, while the Conference Board’s leading economic index, a predictor of economic growth, continued its decline.The major averages initially opened lower but quickly reversed course. The Nasdaq Composite and the S&P 500 indices remained in positive territory for the majority of the session, while the Dow Industrials struggled and closed slightly lower.Small-cap stocks experienced a sell-off, with the Russell 2000 Index plunging by 0.80%.Communication services, consumer discretionary, and IT stocks performed well, while energy, IT services, and real estate stocks faced selling pressure. U.S. Indices’ Performance on ThursdayIndex Performance (+/-)ValueNasdaq 100+0.6%14,943.54S&P 500 Index+0.04%4,364.68Dow Industrials-0.11%33,913.90Russell 2000-0.72%1,865.11Analyst Color:The major indices are up solidly so far this month. Going by historical performance, an analyst sees this as positive for the market.Carson Group’s Ryan Detrick noted that when the S&P 500 is up between 10-15% for the six months ended June, the index has advanced for the rest of the year 12 out of 12 times. With six sessions to go for the half-year, the S&P 500 is up 14.13%.More importantly, the median gain is about 11%, Detrick said. The average year median gain for the final six months has been 5%, he added.Futures TodayFutures Performance On FridayFuturesPerformance (+/-)Nasdaq 100 -0.44%S&P 500-0.39%Dow-0.39%R2K -0.63%In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY slipped 0.48% to $434.42 and the Invesco QQQ ETF QQQ fell 0.63% to $363.87, according to Benzinga Pro data.Upcoming Economic Data:S&P Global is due to release its preliminary manufacturing and services purchasing managers’ indices for June at 9:45 a.m. EDT. The manufacturing PMI is expected to remain almost flat at 48.5 and the services PMI is expected to slip from 54.9 in May to 54 in June.Atlanta Fed President Raphael Bostic is due to participate in a conversation on relevant topics to the finance community and business before the University of Georgia Terry College of Business CFO Roundtable at 8 a.m. EDT.Cleveland Fed President Loretta Mester will give the closing remarks before the “Policy Summit 2023: Communities Thriving in a Changing Economy” conference hosted by the Federal Reserve Bank of Cleveland at 1:40 p.m. EDT.See also: Futures Trading: Best Futures To TradeStocks In Focus:Commodities, Bonds, Other Global Equity Markets: Crude oil futures slipped 1.84% to $68.23 in early European trading on Friday. The commodity plunged 4.16% on Wednesday.The yield on the benchmark 10-year Treasury note fell 0.057 percentage points to 3.742%.Major Asian markets plunged on Friday, with the Japanese, Hong Kong, Chinese, Australian and South Korean markets declining steeply. The Bank of England’s bigger-than-expected rate hike and domestic data showing lackluster business activity and a pick up in the pace of inflation in Japan sent traders scurrying for cover.European stocks extended their lean patch after the Bank of England’s shocker. The major averages in the region were lower in late-morning trading, extending the weakness for a fifth straight session.Read Next: Third Consecutive Week Of Higher-Than-Expected Unemployment Claims: Is US Job Market Losing Steam?
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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