U.S. Futures Decline Amid Fed Chair Powell’s Comments and Retail Sales Anticipation
December S&P 500 E-Mini futures (ESZ24) are down -0.58%, while Nasdaq 100 E-Mini futures (NQZ24) dropped -0.90% in early trade as markets react to Federal Reserve Chair Jerome Powell’s caution against prematurely lowering interest rates. Investors are now eyeing key U.S. economic data, particularly the October retail sales report, expected to show a 0.3% m/m increase.
Key Economic Updates
- U.S. PPI Data: October’s producer price index rose +0.2% m/m and +2.4% y/y, aligning with forecasts but signaling gradual inflation moderation.
- Jobless Claims: Initial jobless claims fell to 217K, a 5.5-month low, indicating a resilient labor market.
- Upcoming Data: Retail sales, industrial production, and the NY Empire State Manufacturing Index are all due today, alongside speeches from Fed officials Susan Collins and John Williams.
Federal Reserve Commentary
Powell noted that the economy is performing well, justifying a cautious approach to rate reductions. Richmond Fed President Thomas Barkin and Governor Adriana Kugler emphasized inflation vigilance and labor market dynamics, suggesting a balanced approach to potential policy shifts.
Corporate Highlights
- Super Micro Computer (SMCI): Fell -11% after delaying a 10-Q filing, reflecting AI sector challenges.
- Cisco Systems (CSCO): Dropped -2% as weak full-year sales guidance overshadowed strong quarterly results.
- Tapestry (TPR): Gained +12% after terminating a merger deal with Capri Holdings.
- Walt Disney (DIS): Rose +6% on upbeat earnings and FY25 growth projections.
Pre-Market Movers
- Applied Materials (AMAT): Down -7% after disappointing FQ1 revenue forecasts.
- Domino’s Pizza (DPZ): Up +8% following Berkshire Hathaway’s new stake in the company.
Global Market Performance
- Europe: Euro Stoxx 50 futures edged down -0.08% as cautious sentiment prevailed.
- Asia: China’s Shanghai Composite closed -1.45% lower amid mixed economic data, while Japan’s Nikkei 225 gained +0.28% on yen weakness.
Key International Data
- China: October retail sales grew +4.8% y/y, while industrial production lagged expectations at +5.3% y/y.
- Japan: Q3 GDP increased +0.2% q/q, supported by rising consumption.
- Europe: U.K. GDP rose +0.1% q/q, with inflation figures in France and Italy remaining subdued.
Market Outlook
Markets remain on edge, balancing strong corporate results and resilient economic data against the Fed’s cautious stance and geopolitical concerns. Today’s retail sales and Fed speeches will likely set the tone for near-term market direction.
