China’s Xi speaks with Trump by phone, discusses Taiwan and bilateral ties
Investing.com - Futures linked to Canada’s main stock index were broadly steady on Monday, as investors assessed the outlook for Federal Reserve interest rate policy.
By 06:46 ET (11:46 GMT), the S&P/TSX futures contract was mostly unchanged.
On Friday, the S&P/TSX composite index rose by 0.9% to 30,160.65, paring back some of its weekly decline. Still, it finished 0.5% lower for the week.
Underpinning sentiment in the previous session were hopes that the Fed will slash interest rates once again in December, after having brought down borrowing costs by 25 basis points at each of its past two gatherings in September and October.
U.S. futures point up
U.S. stock futures edged higher as resurgent bets on a December rate cut by helped turn around recent gloom over falling technology stocks.
At 07:01 ET, Dow Jones Futures inched up by 22 points, or 0.1%, S&P 500 Futures gained 23 points, or 0.4%, and Nasdaq 100 Futures climbed 144 points, or 0.6%.
U.S. stock index struggled last week, with the S&P 500 slipping 2%, bringing its November decline to 3.5%. The tech-heavy NASDAQ Composite shed 2.7% in the prior week and is down 6.1% for the month, while the blue chip Dow Jones Industrial Average fell 1.9% last week and is off 2.8% month-to-date.
December rate cut bets rebound
Heightened concerns over an artificial intelligence-fueled valuation bubble were the biggest driver of tech’s losses in recent weeks, as investors locked in profits from a near three-year rally.
However, sentiment has turned after New York Fed President John Williams called for a rate cut in December, contrasting more cautious comments from other Fed officials and presenting a split outlook among Fed members on the December decision.
Bets on a December interest rate cut have since rebounded sharply in recent sessions, with the probability of a 25-basis-point rate cut jumping to around 69% from about 44% a week earlier, according to the CME FedWatch Tool.
A host of long-delayed economic readings are due this week, and will offer some cues on the health of the U.S. economy and thus the Fed decision.
Producer inflation, retail sales, and industrial production prints for September are due on Tuesday, while third-quarter gross domestic product data is due on Wednesday.
Any signs of a cooling labor market and economic growth are likely to further the case for more easing by the Fed.
But the central bank is still seen flying semi-blind into the December meeting, with the important November payrolls report, which will also include some of the delayed October release, not due until after the last meeting of the year.
Agilent leads off holiday-shortened week
On the earnings calendar, investors will be keeping tabs on an ebbing stream of quarterly reports this week, although Thursday’s Thanksgiving holiday will limit activity.
Life sciences firm Agilent Technologies (NYSE:A) will highlight the agenda on Monday, with observers keen to see how the company is grappling with tepid order levels over the last two years. Still, there have been signs that demand for its tools and services needed to develop new medicines has stayed resilient.
Elsewhere, Bloomberg reported that Lenovo Group (HK:0992), the world’s largest PC maker, is stockpiling memory chips amid an unprecedented supply squeeze due to the artificial intelligence industry.
The company is stockpiling component inventories that are roughly 50% higher than usual, CFO Winston Cheng said in an interview on Bloomberg TV, as outsized memory demand from AI data centers and cloud hardware tightened memory chip supplies and ramped up prices.
This trend is also expected to raise the prices of consumer electronics, which could hurt demand for Lenovo’s products in the coming quarters.
Crude falls on potential Ukraine-Russia peace deal
Investors are also looking for progress in plans for a Ukraine-Russia peace deal.
The United States and Ukraine were anticipated to carry on negotiations over a potential peace agreement which would bring a halt to the latter’s prolonged war with Russia. Both sides said on Sunday they would make changes to an initial proposal put forward by U.S. President Donald Trump, which critics have claimed was too favorable for Russia.
Trump previously urged Ukraine to sign on to the peace plan by Thanksgiving later this week, but U.S. Secretary of State Marco Rubio has suggested the deadline was not unmovable.
Both contracts fell around 3% last week, hitting their lowest settlements since October 21, as market participants worried that a Russia-Ukraine peace deal could see Russia crude returning to the global market.
Gold wavers around flatline
Spot gold prices edged up, while gold futures ticked lower, with traders eyeing the rebound in wagers on a December interest rate cut by the Fed.
A recovery in equities and other risk-driven markets threatened to sap demand for gold, as did reports around Russia-Ukraine ceasefire talks.
But lingering concerns over global fiscal health and a diplomatic spat between China and Japan offered some support to gold, with the yellow metal hovering above $4,000 an ounce. Traders were also gearing up for a barrage of key U.S. economic readings this week.