More key US inflation data, Foxconn’s optimism, TikTok ban – what’s moving markets

More key US inflation data, Foxconn’s optimism, TikTok ban – what’s moving markets — U.S. equity futures point to a higher open as investors await the release of the latest inflation gauge, the last major report before next week’s Federal Reserve meeting. Foxconn expresses confidence for the rest of the year, while TikTok face more political pressure on Capitol Hill.

  1. PPI loom as next inflation gauge
    There is another measure of U.S. inflation for investors to keep an eye on Thursday, the producer price index for February.

This release will have extra focus this time out after Tuesday’s hotter-than-expected CPI print raised questions about the likelihood of a rate cut by the Federal Reserve in June.

The PPI measures inflation from the perspective of the product manufacturer or service supplier, and is widely seen as a leading indicator for the more widely-followed consumer price index.

It is expected to rise 0.3% on the month in February, an annual rise of 1.1%, while the core annual figure, which excludes volatile food and energy prices, is seen falling to 1.9%, from 2.0% the prior month.

The consumer price index rose 0.4% last month after climbing 0.3% in January, according to data released on Tuesday, while annually the CPI increased 3.2%, after advancing 3.1% in January.

This suggested some stickiness in inflation, which would be a problem for the Fed ahead of next week’s meeting, where it is widely expected to keep rates on hold as the officials digest all the available economic data.

  1. Futures higher, ahead of key economic data
    U.S. stock futures edged higher Thursday, as investors await the release of key economic data amid uncertainty over when the Federal Reserve will start its much-anticipated rate-cutting cycle.

By 05:00 ET (09:00 GMT), the Dow futures contract was 135 points, or 0.4%, higher, S&P 500 futures had risen by 18 points or 0.4%, and Nasdaq 100 futures had climbed by 95 points or 0.5%.

Investors are watching out for the release of February’s producer price index later in the session [see above], the last major piece of inflation data to be released prior to next week’s Federal Reserve’s policy meeting.

All due for release Thursday will be the weekly jobless claims report and retail sales for January.

Wells Fargo on Wednesday became the latest major bank to adjust its forecast for the first rate cut from the Fed to June, from May, with inflation proving more sticky than previously been expected.

In corporate news, Robinhood (NASDAQ:HOOD) stock jumped premarket after the trading platform reported a 16% increase in assets under custody in February from the prior month.

Fisker (NYSE:FSR) slumped premarket after the Wall Street Journal reported that the electric vehicle startup has hired restructuring advisors to prepare for a potential bankruptcy filing.

  1. TikTok under U.S. political pressure
    TikTok has returned to the political spotlight after the U.S. House of Representatives overwhelmingly passed a bill on Wednesday that would give Chinese owner ByteDance about six months to divest the popular social media app or face a U.S. ban.

The measure is the latest in a series of moves in Washington to respond to U.S. national security concerns about China, with many politicians not wanting to be seen as soft on the Asian giant during an election year.

The bill now heads to the Senate, where it faces a more uncertain path as senators appear more divided on the legislation, especially with about 170 million Americans users of the popular app.

The bill gives the company 165 days to file a legal challenge after it is signed by President Joe Biden, who said last week he would do so. TikTok CEO Shou Zi Chew said last week it would do so if required.

In 2020, then-President Donald Trump sought to ban TikTok and Chinese-owned WeChat but was blocked by the courts.

  1. Foxconn sees strong 2024
    Apple (NASDAQ:AAPL) supplier Foxconn posted a hefty jump in fourth-quarter profit earlier Thursday, even as revenue dipped, and offered up a positive outlook for the year as a whole amid booming demand for AI servers.

The Taiwanese company said fourth-quarter net profit soared 33% from the same period the previous year, even as revenue slipped 6%, with consumer electronics including smartphones accounting for 58% of revenue while cloud and networking products, including servers, contributed 20%.

Foxconn, formally called Hon Hai Precision Industry Co Ltd (TW:2317), had previously pointed to expected slowness in this year’s first quarter, but added Thursday that it sees 2024 revenue increasing significantly year-on-year.

The world’s largest contract electronics maker is a major supplier for Apple, with the iPhone maker last month reporting sales and profit that beat Wall Street estimates, even though its China sales missed analysts’ targets.

  1. Oil near four-month highs
    Oil prices edged higher Thursday, continuing the recent gains and remaining near four-month highs after a substantial draw in crude inventories pointed to tighter fuel supplies.

By 05:00 ET, the U.S. crude futures traded 0.9% higher at $80.44 a barrel, while the Brent contract climbed 0.8% to $84.73 per barrel.

Both contracts had risen about 3% on Wednesday, to their highest levels since late-November, after an unexpected draw in U.S. oil and gasoline inventories indicated that demand in the world’s largest fuel consumer was picking up from a winter lull, especially as more refineries resumed operations after an extended winter break.

Helping sentiment was the news that the U.S. bought around 3.25 million barrels of oil for the country’s Strategic Petroleum Reserve, as well as continued Ukrainian drone strikes on Russian refining facilities.

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