14/08/2024 Daily Reports
U.S. stock futures remained steady on Wednesday as investors awaited the much-anticipated July consumer inflation report, hoping to see further evidence that inflation is cooling.
On Tuesday, the Dow and S&P 500 saw gains of 1.04% and 1.69%, respectively, while the tech-focused Nasdaq Composite surged 2.43%. The rally was driven by cooler-than-expected producer inflation data, fueling expectations for a larger interest rate cut by the Federal Reserve in September.
Chipmakers and other major tech stocks were the primary drivers of the market’s rise, with standout performances from Nvidia (up 6.5%), AMD (up 3.2%), SMCI (up 4.9%), Tesla (up 5.2%), and Meta Platforms (up 2.4%).
Starbucks also saw a significant jump, soaring 24.5% after announcing Chipotle’s Brian Niccol as its new CEO, signaling a potential turnaround for the company.
In contrast, Alphabet dropped 0.8% in after-hours trading following reports that the DOJ may push to break up Google over antitrust concerns.
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The Reserve Bank of New Zealand surprised markets by cutting interest rates by 25 basis points to 5.25%, marking its first policy easing since 2020 and a year earlier than expected. This abrupt move follows a trend of easing by other central banks like those in Europe, Canada, and the UK. The kiwi dollar dropped 1% on the news, and markets are now pricing in further cuts by December.
In Asia, stocks are up as U.S. producer prices rose less than expected, fueling hopes for benign inflation data later in the day. European futures indicate a higher open, with key economic data releases on tap, including UK inflation, U.S. CPI, and Eurozone GDP.
Meanwhile, political developments in Japan saw the yen strengthen slightly as Prime Minister Fumio Kishida announced plans to step down in September, after a term marked by rising prices and political scandals.
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Oil Prices Climb on Expected Drop in U.S. Crude Inventories
On Wednesday, oil prices increased due to forecasts of declining U.S. crude and gasoline inventories. Additionally, the market was attentive to the potential expansion of the Middle Eastern conflict, which could impact global oil supply.
According to market sources referencing data from the American Petroleum Institute on Tuesday, it was anticipated that U.S. crude oil and gasoline inventories decreased over the past week, whereas distillate stocks were expected to have increased. Official data from the Energy Information Administration is expected later on Wednesday.
The market was also watching for potential actions from Iran, which has promised a strong reaction to the killing of a Hamas leader last month, an act Tehran attributes to Israel. Israel has not confirmed or denied involvement. In response, the U.S. Navy has deployed warships and a submarine to the Middle East to support Israeli defenses. Analysts noted that an escalation in regional conflict could impact crude oil supplies from Iran and neighboring countries, potentially tightening inventories and driving up prices.
Meanwhile, the International Energy Agency (IEA) maintained its forecast for global oil demand growth in 2024 but reduced its 2025 estimate, citing the effects of a sluggish Chinese economy on consumption.
