(CercleFinance.com) – The New York Stock Exchange should rebound on Wednesday morning following its heavy decline the day before, following poor inflation figures and doubts regarding the Fed’s rate trajectory.
Half an hour before the opening, futures contracts on the main New York indices advanced from 0.2% to 0.5%, announcing an opening in positive territory.
The S&P 500 – the benchmark index for American managers – ended yesterday’s session with a decline of 1.4% and hit the psychological threshold of 5,000 points after the announcement of a less pronounced slowdown than expected in the consumer price index in January.
‘This report reaffirms our view that the US Federal Reserve will not cut rates before the middle of the year, or even later,’ responded Tiffany Wilding, economist at PIMCO.
From an analyst’s point of view, the re-acceleration of prices in the most persistent categories of the statistic, namely basic services, should give concern to Jerome Powell and his colleagues.
The probability, according to market participants, of a first rate cut next month has plummeted, to 8.5% compared to 76.9% a month earlier, according to the CME Fedwatch survey.
Investors should still be reassured by the recovery made overnight by the major European markets, which are all regaining ground today.
The rating could also benefit from some cheap buybacks after the losses of the day before, even if the results period begins to come to an end and no major economic meeting is on today’s agenda.
In short, investors could struggle to find new reasons to extend the dynamic at work since the start of the year, which has already caused the S&P to gain nearly 4%.
Many strategists believe, however, that there is no reason for the favorable dynamics of the stock markets to be interrupted given the current buoyant environment.
‘The higher-than-expected inflation figures do not change our central scenario of a soft landing in growth accompanied by a slowdown in inflation and a 100 basis point cut in Fed rates this year, probably from the second quarter’, assures Mark Haefele, the investment director of the wealth management branch of UBS.
Concerning stocks to watch, Kraft Heinz is expected to decline after revealing an operating profit down 5.3% to 1.65 billion for the last quarter of 2023.
Uber should, on the contrary, jump 7% after announcing the launch of a share buyback program of a maximum amount of seven billion dollars.
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