Stocks Rise With Traders Braced for CPI Volatility: Markets Wrap – Yahoo Finance

March 12, 2024

(Bloomberg) — U.S. stock futures rose along with European stocks ahead of much-anticipated U.S. inflation data that will help decide when the Federal Reserve will finally ease monetary policy.

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Citigroup says the options market is more worried about the S&P 500’s big swings after the inflation report than about next week’s Fed interest rate decision. Traders are hedging a 0.9% move in either direction, which is the biggest implied change going forward. Consumer Price Index Report from April 2023 onwards.

“Today is another CPI day, and there will be a lot of volatility around the data,” Claudia Pancelli, France chief investment officer at UBS Global Wealth Management, said in an interview with Bloomberg TV. “Importantly, the market has normalized expectations for rate cuts. We still expect inflation to fall and we still expect the Fed to cut rates in June.”

S&P 500 and Nasdaq 100 futures rose 0.2% and 0.5%, respectively. US Treasury yields were stable and the dollar exchange rate was flat. The 0.5% rise in European stocks was led by basic resources and banks.

Composite CPI is likely to accelerate, while core metrics are expected to slow slightly, according to Bloomberg Economics. A monthly interest rate below 0.4% would be considered a positive catalyst, Panseri said.

“Ultimately, we do not expect February’s CPI report to provide enough clear evidence of disinflation to give the Fed confidence in rate cuts,” Bloomberg economists Anna Wong and Stuart Paul wrote in a note. said. “But they can have plenty of confidence in May.”

The yen rose for the first time in six days after Bank of Japan Governor Kazuo Ueda pointed out weakness in some non-durable goods consumption and also suggested that the Bank of Japan was on track to end its negative interest rate policy. It fell. The Bank of Japan will make its next policy decision on March 19th.

Japan’s 10-year bond yield rose to its highest level in three months following a current report that the Bank of Japan will lift negative interest rates at next week’s meeting if the wage data is positive.

In commodities, oil edged higher as traders awaited OPEC’s monthly report and industry data on U.S. stockpiles. Gold has fallen from all-time highs. Bitcoin held just above $72,000 after surpassing that level for the first time on Monday.

Company highlights:

Arcadia Pharmaceuticals announces that it will not conduct further trials of pimavanserin after a Phase 3 trial in schizophrenia failed to meet its primary endpoint. The company’s stock price has fallen.
Oracle shares rose after the infrastructure software company reported better-than-expected third-quarter results and said “demand for our second-generation AI infrastructure significantly exceeds supply.” .
Porsche AG showed signs of slowing business performance this year, with the launch of a record four new models weighing on sales and profits. Operating profit margin is expected to be 15% to 17%, lower than analysts expected and below the company’s medium-term goals.

This week’s main events:

UK Monetary Policy Committee quarterly meeting attended by Bank of England Governor Andrew Bailey on Tuesday
EU finance ministers meet in Brussels on Tuesday
ECB Executive Board Member Robert Holzmann, Tuesday
US Consumer Price Index, Tuesday
Eurozone industrial production, Wednesday
ECB Executive Board member Giannis Stournaras speaks on Wednesday
Volkswagen, Adidas financial results, Wednesday
US PPI, Retail Sales, New Unemployment Insurance Claims, Business Inventories, Thursday
Chinese real estate prices Friday
Japan’s largest trade union federation announces results of annual wage negotiations on Friday ahead of Bank of Japan policy meeting
Bank of England releases inflation survey on Friday
US Industrial Production, University of Michigan Consumer Sentiment, Empire Manufacturing, Friday