OPENING CALL
Stock futures edged lower on Thursday, while bond yields remained within the week's tight range, with the meagre moves reflecting investor reticence to make bold bets before important inflation data on Friday.
The February personal consumption expenditure price index, the Federal Reserve's favored inflation gauge, will be released at 8:30 a.m. Eastern when markets are shut for the Good Friday break. Indeed, bond markets will close on Thursday at 2 p.m. ahead of the holiday.
The central bank will want to see from the PCE report that price rises are not reaccelerating, because if they are then it makes rate cuts starting in the summer less likely.
Fed Governor Christopher Waller on Wednesday said recent inflation data was "disappointing" so there is no rush to lower interest rates and it may be necessary to reduce the number of expected cuts this year.
"Markets will undoubtedly focus on his [Waller's] pushback against early rate cuts as progress in the battle against inflation 'may have stalled', " Mohamed El-Erian, adviser to Allianz, said.
"This speech will increase the focus on Powell's upcoming remarks," he added.
Jerome Powell is due to make comments at 11:30 a.m. on Friday.
Markets are pricing in a 94.7% probability that the Fed will leave interest rates unchanged at a range of 5.25% to 5.50% after its next meeting on May 1, according to the CME FedWatch tool.
The chances of at least a 25 basis point rate cut by the subsequent meeting in June is priced at 63.9%. The central bank is expected to take its Fed funds rate target back down to around 4.68% by December 2024, according to 30-day Fed Funds futures.
Premarket Movers
Braze reported a fiscal fourth-quarter adjusted loss of 4 cents a share, narrower than analysts' estimates. The stock, however, fell 5.1%.
Chemours was down 8.5% after it said it was cooperating with information requests from the SEC and U.S. attorneys in the Southern District of New York related to an internal review over its accounting.
MillerKnoll fell 13% after it issued a weaker-than-expected fiscal fourth-quarter forecast, saying that "demand patterns" across much of its business "have continued to be sluggish."
RH said it expected "business conditions to remain challenging until interest rates ease and the housing market begins to rebound" but anticipates "demand trends to accelerate throughout fiscal 2024." The stock rose 9.2%.
Sprinklr reported fourth-quarter earnings that beat analysts' estimates and a 19% jump in subscription revenue. Shares rose 5.6%.
Trump Media & Technology Group rose 1.5%. Shares closed 14% higher on Wednesday after jumping 16% in their trading debut on Tuesday.
Watch For:
Weekly Jobless Claims; 3rd Estimate GDP for 4Q; University of Michigan Final Consumer Survey for March; Canada GDP for January
Today's Headlines/Must Reads:
- The S&P 500 Is Poised for Best Start to Year Since 2019
- Fortune Favors Early Movers in America's Property Crunch
- Three Presidents With a Complex Past Team Up to Defeat Trump
MARKET WRAPS
Forex:
The dollar rose in Europe, reaching its strongest in six weeks against a basket of currencies, after Christopher Waller's speech.
"It sounds like he may well have recently shifted his own view on the Fed easing cycle to two cuts this year, and his message was one of shallower and later rate cuts," ING said.
"It feels like the greater risks are DXY popping through 104.50 towards 105.00."
Bonds:
The 10-year Treasury yield is expected to trade in the 3.75%-4.25% range until mid-year, with a potential to drift lower, Societe Generale Research said.
"With no clear catalysts for a sustained sell-off and the Fed biased toward easing, the risk to yields are skewed to the downside."
That said, with relatively strong data it is also hard to justify a sustained rally, it added.
Without a strong conviction on directional moves, Societe Generale Research looks at carry-efficient ways to position for the coming weeks.
Energy:
Oil prices rose despite a surprise build in U.S. crude inventories last week.
"WTI's trend still appears constructive, with the commodity carving out a bullish continuation pattern," Capital.com said.
Metals:
Base metals were mixed with gold making small gains as the market remained nervous ahead of key U.S. inflation data.
A stable dollar and lower Treasury yields have further helped the yellow metal to trade higher, ING said.
There are mixed views in the market regarding the U.S. interest rate cuts planned for the year--Chicago Mercantile Exchange data shows that swap markets have now trimmed the probability of a rate cut in June to 60%, from 69% late last week, ING added.
TODAY'S TOP HEADLINES
Fisker Slashes Prices on 2023 EV Models in Affordability Bid
Struggling electric-vehicle maker Fisker is cutting the suggested prices for some of its 2023 model-year vehicles, a bid to drum up demand for its cars as the startup struggles for cash.
The Los Angeles-based company said late Wednesday that its would reduce its Manufacturer's Suggested Retail Price on 2023 Ocean models, including the Extreme, Ultra and Sport trims.
Schlumberger to Invest Nearly $400 Million in Carbon-Capture Venture
Schlumberger will pay almost $400 million to acquire 80% of carbon-capture company Aker Carbon Capture, creating a combined carbon-capture-focused venture.
Oil-field-services company Schlumberger said late Wednesday that it would pay 4.12 billion Norwegian krone ($381.5 million) for the stake in the company and would contribute its own carbon-capture business to the combined venture. Schlumberger may also make 1.36 billion Norwegian krone in performance-based added payments in the next three years.
UBS CEO Ermotti to Stay to See Through Credit Suisse Integration
UBS Group said Sergio Ermotti is set to stay as chief executive officer to see through the integration of Credit Suisse, and sought to address concerns about its size and potential needs for tighter regulation.
The Swiss banking group said regulations and capital requirements weren't the problem that led to the downfall of Credit Suisse as it lowered an accounting gain on the acquisition of its former rival, triggering a restatement of its net profit for last year.
Why Gasoline Prices Are Rising Faster Than Usual This Year
Nic Malick felt so "road-trip rich" early this month that he and his wife drove their children 150 miles to Springfield, Mo., visiting friends and trying the brisket at Buc-ee's, a convenience store chain with a cultlike following. Another getaway isn't looking likely.
"With gas prices the way they are, it doesn't make sense," said Malick, who lives outside of Kansas City, Mo., and is now spending as much as $20 more on gas a week.
China faces a 'lost decade' if it fails to tackle its debts, says Ray Dalio
China faces a "100-year big storm" and needs to tackle its debts, or it could endure a lost decade akin to the economic stagnation that gripped Japan in the 1990s.
That's Ray Dalio, billionaire investor and founder of hedge-fund Bridgewater Associates, in a Wednesday blog post on LinkedIn, urging Chinese leader Xi Jinping to reduce Beijing's debt load, while also easing monetary policy and guiding its economy through the tumult.
Three Presidents With a Complex Past Team Up to Defeat Trump
WASHINGTON-When President Biden takes the stage in New York City Thursday for a major campaign fundraiser with two former Democratic presidents, Bill Clinton and Barack Obama, there will be plenty of shared history and unity about the stakes of the 2024 election-and a few long-simmering resentments.
Biden has deep ties to Obama, with whom he served as vice president for eight years, and a lengthy past with Clinton, who presided over a legislative agenda in the 1990s that was helped by Biden's senior role in the Senate. The incumbent has talked with both the 42nd and 44th presidents about the best strategies for beating the 45th, Donald Trump, again in November.
Legal Fight Over Destroyed Baltimore Bridge Is Likely About to Start
The first shot in the legal fight over who will pay for the damage and loss from the collapse of the Francis Scott Key Bridge will likely occur in the next few days in a Baltimore courtroom, insurance academics said.
The Singaporean owner of the cargo ship that took down the bridge is expected to invoke a law dating back to the 19th century that limits the liability of ships' owners, according to Lawrence Brennan, a law professor at Fordham University in New York. The law is similar to one used by the Titanic's owners after that "unsinkable" liner hit an iceberg.
Investigation Into Ship Malfunction and Baltimore Bridge Collapse Could Take Years, Officials Say
U.S. officials said it could take years to investigate why a giant cargo ship malfunctioned and crashed into a bridge in Baltimore, as they rushed to reopen a vital shipping lane blocked by the collapsed bridge.
Jennifer Homendy, the chair of the National Transportation Safety Board leading the investigation, said late Wednesday that investigators had interviewed the captain, first mate, chief engineer and others of the containership Dali, a Singaporean vessel. The agency also recovered a voyager data recorder, which Homendy said was much more basic than a "black box" aboard an aircraft, as well as the cargo manifest.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings [4Q unless stated otherwise]:
Aya Gold & Silver
BRP
Hut 8
Economic Calendar:
0830 Jan Employment
0830 Jan GDP
Stocks to Watch:
AirBoss Announces Amendment to Credit Facilities; Facility Downsized to $150 Million From $250 Million in 2024 and 2025; Facility Downsized to $175 Million Thereafter
Dundee 4Q Loss C$2.8M
Global Atomic 2023 Loss/Shr C$0.08; Rev C$689,996
Hammond Power Solutions 4Q EPS C$1.68; 4Q Sales C$187M; Raises Dividend to C$0.275
(MORE TO FOLLOW) Dow Jones Newswires
03-28-24 0618ET
