US Futures Overview
Current futures:
- Dow futures are down 0.12% at 44,322
- S&P futures are up 0.1% at 6058
- Nasdaq futures are up 0.14% at 21,476
European Market Update
- FTSE is down 0.4% at 8,308
- DAX is up 0.03% at 20,390
Market Insights
- US stocks are trading in a narrow range
- Investors are keenly awaiting the US CPI data scheduled for Wednesday
- Oracle's shares fell after it missed earnings and revenue expectations
- Oil prices have declined following weaker-than-expected trade data from China
Stocks Seek Stability Ahead of CPI Report
U.S. stock markets are anticipated to experience a subdued opening on this Tuesday, particularly after significant declines in the market on the previous day, with a spotlight on the forthcoming inflation statistics.
Wall Street faced challenges yesterday, primarily due to a retreat in technology stocks, pulling major indices down from their recent peaks. The Nasdaq 100 suffered the most, closing 0.6% lower.
Today's economic calendar appears relatively quiet, with major attention directed toward tomorrow's inflation reading, expected to shape the Federal Reserve's upcoming monetary policy decisions.
The consensus estimate indicates that the headline Consumer Price Index (CPI) will rise to 2.7% year-on-year, compared to 2.6% in October, while the core CPI should remain stable at 3.3%. Despite a general decline in inflation rates throughout the year, recent months have shown persistence, causing concern regarding the Fed's capacity to implement rate cuts in 2025. Presently, there's an 85% likelihood of a 25 basis point rate reduction in December, yet the pace of future cuts is projected to decelerate.
Corporate Highlights
Oracle is projected to open approximately 8% lower after the company's latest quarterly earnings fell short of analyst expectations due to intensified competition within the cloud sector. Oracle's earnings per share (EPS) were reported at $1.47, slightly below the forecast of $1.48, while revenues totaled $14.06 billion versus the expected $14.1 billion. Despite this downturn, the company's stock has surged by 80% this year.
C3.ai witnessed a 10% surge following its quarterly earnings report, which exceeded projections, driven by robust demand linked to AI technologies.
Autozone's shares are facing a decline in pre-market trading after the retailer's Q1 earnings fell below expectations.
Technical Analysis of Nasdaq 100
The Nasdaq 100 is trading near the upper limit of a rising wedge pattern, often considered a bearish formation. After retreating from the recent high of 21,500, the upward trend seems to remain strong. Buyers are aiming to breach the 21,500 mark to potentially reach new all-time highs towards 22,000. Immediate support can be identified at 21,232, marking November's peak, and at 21,000, which aligns with a rising trendline. Should these levels break, the 50-day simple moving average (SMA) at 20,600 would come into play.
FX Market Movements
The US dollar is on a rally, marking its third consecutive day of gains as traders await the CPI data for insights into the Federal Reserve's rate trajectory.
EUR/USD is under pressure as attention shifts to the upcoming ECB meeting, with expectations of a 25 basis point rate cut. Some market players speculate on a potential 50 basis point reduction, given the bleak economic outlook, which would further weigh on the euro.
AUD/USD has declined following the Reserve Bank of Australia's decision to maintain interest rates at 4.35% for the ninth consecutive month, with recent language indicating a more dovish future outlook, raising chances of earlier than expected rate cuts. The RBA expressed greater confidence in reaching its inflation targets.
Oil Prices React to Chinese Trade Report
Oil prices have seen a downturn, driven in part by easing concerns surrounding Middle East geopolitical tensions, coupled with disappointing trade data from China. However, losses are somewhat moderated by renewed optimism regarding China's shifts in monetary policy.
Chinese trade figures show a 3.9% decline in imports, while exports increased by a lesser-than-expected 6.7%, highlighting persistent weaknesses in the Chinese economy. Such statistics have raised uncertainty over future demand from the world's largest oil importer. Conversely, there is a degree of reassurance following announcements that China is set to adjust its monetary policy in 2025, aiming to bolster economic growth, marking its first easing move in approximately 14 years, although specific details remain limited.
Meanwhile, geopolitical issues in the Middle East seem to be stabilizing, with factions that previously deposed President Bashar Al-Assad now focused on forming a government and restoring order.
