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Stock indices finished today’s trading session in the green, as the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.85%, 0.39%, and 0.43%, respectively. In November, U.S. consumers adjusted their short-term inflation expectations downward, as reported by the Federal Reserve Bank of New York. The median prediction for inflation one year ahead dropped to 3.4%, the lowest since April 2021, from October’s 3.6%. However, longer-term inflation expectations over three and five years remained stable at 3% and 2.7%, respectively.
In the labor market, anticipated earnings growth over the next year decreased slightly to 2.7%. Additionally, job security concerns are growing, with the perceived probability of job loss in the coming year rising to 13.6%. Household income expectations stayed steady at 3.1%, and median household spending growth expectations slightly fell to 5.2%. Interestingly, perceptions of credit access have improved, with fewer people finding it harder to obtain credit compared to last year.
Meanwhile, in a CNBC interview, Mike Coop, Chief Investment Officer for EMEA at Morningstar, anticipates an economic slowdown in the U.S. and a decrease in inflation as people allocate more funds toward debt. He doesn’t foresee a deep recession but expects a gradual change in the labor market, influenced by how authorities react to changing conditions.
Reflecting on recent years, Coop observed a shift from the tight labor markets of 2021 and global supply constraints to a gradual easing of labor market conditions. This change, he notes, is more evident globally than in the U.S. data.
First Published: 3:16AM EST
U.S. Futures are trading in red on Monday morning as investors brace for the final Federal Reserve meeting of 2023, scheduled to take place this week. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are down by 0.21%, 0.09%, and 0.06%, respectively, at 3:13 a.m. EST, December 11.
The Federal Open Market Committee’s (FOMC) two-day meeting begins tomorrow. Fed Chair Jerome Powell will disclose the interest rate decision on December 13, followed by his speech. Traders are expecting the Fed to maintain the current interest rates. Going forward, the Fed’s tone (hawkish/dovish) is expected to drive the markets.
Among the key economic releases lined up this week, November’s Consumer Price Index report is set to be released on Tuesday, and November’s Producer Price Index data is expected on Wednesday. Additionally, November’s Retail Sales and December’s S&P Global Manufacturing PMI and Services PMI reports are scheduled to be released on December 14 and December 15, respectively.
On the corporate front, Oracle (ORCL) is scheduled to release fiscal second-quarter results after the market closes today. Other notable earnings this week include Adobe (ADBE), Costco Wholesale (COST), Lennar (LEN), and Darden Restaurants (DRI).
At the time of writing, oil prices were trending upward, fueled by two positive developments. These include a strong US jobs report and the announcement of plans to refill the Strategic Petroleum Reserve (SPR) with up to 3 million barrels of crude oil. The WTI crude oil futures were trading near $71.79 per barrel as of the last check.
Elsewhere, European indices are expected to start trading on a positive note as traders await the interest rate decisions of central banks around the globe this week.
Asia-Pacific Markets End Higher on Monday
A majority of Asia-Pacific indices ended in the green on Monday as investors digested China’s November inflation data, which points to falling prices. Also, the growing belief among investors that Japan’s central bank might refrain from raising interest rates contributed to the rise.
Hong Kong’s Hang Seng index ended lower by 0.87%, while China’s Shanghai Composite and Shenzhen Component indices ended higher by 0.74% and 0.82%, respectively.
Similarly, Japan’s Nikkei and Topix indices finished higher by 1.5% and 1.47%, respectively.
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