Wall Street: calm session ahead before inflation and the start of quarterly reports

(Boursier.com) — Wall Street is down slightly in the pre-session after its nice rebound on Friday. A surge which did not prevent the Dow Jones Industrial Average from posting a loss of nearly 2.3% over the week, its worst weekly performance in more than a year. The S&P 500 lost around 1% and the Nasdaq Composite slipped 0.8%.

While the Fed maintained its forecast to cut interest rates three times this year at its last meeting, discussions are growing over whether the Federal Reserve will do so after the robust data. jobs revealed on Friday. On Thursday, Minneapolis Fed President Neel Kashkari had already suggested that the Fed might not cut interest rates at all this year: “if we continue to see inflation move erratically, that would make me will lead me to ask whether it is really necessary to make these rate reductions. Apollo Global Management chief economist Torsten Sløk said Friday that the jobs report was in line with his previous call for no cuts this year. “We remain confident that the Fed will not cut interest rates this year,” Sløk wrote in a note to clients picked up by ‘Yahoo! Finance’.

Other observers, however, say that labor market data showed positive developments on the supply side, helping to reinforce the hypothesis that a strong labor market and wage growth will not necessarily fuel the ‘inflation. “We view the report as supporting Chairman Powell’s view that the Fed can begin a cautious, gradual easing cycle later this year – provided available inflation data shows improvement,” the statement said. Michael Gapen, economist at Bank of America. “We still think a rate cut in June is likely, although the very good jobs report last Friday makes the subject more moot now,” said Wei Li, chief global investment strategist at BlackRock, on ‘Bloomberg Television’. “We are talking about a labor market that is not only tight, but also very strong.”

These divisions are well reflected by the CME Group’s FedWatch tool since according to the latter there is now approximately as much chance of seeing the Fed carry out a first rate cut as of observing a new status quo during the meeting of the 11 -June 12.


In the meantime, while new inflation figures will be monitored on Wednesday, just like the ECB meeting on Thursday, the micro will start to regain the upper hand with the start of the first quarter results season. JP Morgan, Wells Fargo, BlackRock, Citi and Delta Air Lines will be on deck this weekend.

On the oil market, the barrel of WTI crude fell slightly (-0.7% to 86.3 dollars) on the Nymex but remains high against a backdrop of persistent tensions in the Middle East. An ounce of gold climbs another 0.3% to $2,336. The dollar index gained 0.1% against a basket of currencies and Bitcoin gained almost 4% to $72,000.

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