US stock futures edged up slightly as traders weighed recent comments from U.S. Federal Reserve policymakers surrounding last week’s outsized rate cut. Investors will be watching Fed Governor Michelle Bowman, who was the only official to vote against the big rate cut. Elsewhere, Boeing (NYSE:BA) is presenting what it describes as its “best and final” pay offer to striking workers.
- Futures are rising
U.S. stock futures edged higher on Tuesday after comments from Fed officials about a massive rate cut sent Wall Street stocks higher in the previous session.
By 03:22 GMT (07:22 GMT), the Dow futures had added 37 points, or 0.1%, the S&P 500 futures had risen 8 points, or 0.1%, and the Nasdaq 100 futures had gained 47 points, or 0.2%.
The 30-stock Dow Jones industrial average, the benchmark S&P 500 and the tech-heavy Nasdaq Composite gained on Monday as investors weighed statements of support for the Fed’s excessive 50 basis point rate cut last week. Fed officials including Neel Kashkari, Raphael Bostic and Austan Goolsbee supported the move and advocated further reductions in borrowing costs this year.
Meanwhile, new data showed U.S. business activity held steady in September and average prices of goods and services rose at the fastest pace in half a year. Those data, along with the release of the latest personal consumption expenditures (PCE) price index — one of the Fed’s preferred inflation indicators, could provide an updated look at the state of price growth in the world’s largest economy.
Traders are now betting there’s about a 53% chance the Fed will cut interest rates by half a point again at its next meeting in November, according to CME Group’s (NASDAQ:CME) closely watched FedWatch Tool.
- Fed’s Bowman to speak
Markets will likely watch Tuesday for comments from Fed Governor — and lone dissenter on the size of last week’s rate cut — Michelle Bowman.
Bowman is scheduled to speak at 9 a.m. ET at the annual conference of the Kentucky Bankers Association, according to the Fed.
The remarks come after Bowman said last week that she had favored a cut of a quarter point because of concerns that a larger cut would be misinterpreted by the public as a sign that the Fed’s long-running battle against inflation had been won.
In particular, he noted that so-called “core” PCE, which strips out volatile items such as food and fuel, is currently above the central bank’s preferred target of 2%.
“We have not yet met our inflation target,” Bowman said on Friday, adding that a more measured rate cut would “avoid unnecessarily fueling demand.”
- Boeing makes improved wage offer to striking workers
Boeing has offered a sweeter labor deal to its more than 30,000 striking workers in the US Pacific Northwest, although their union said it would not put the proposal to a vote.
The aerospace giant’s latest offer includes a 30 percent across-the-board pay increase over four years, as well as improved pension benefits and an increased ratification bonus if workers accept the proposal by Friday. Boeing said it was its “best and final” offer.
But the International Union of Engineers and Aerospace Workers, Local 751, which represents the workers, rejected the approach, saying it was “thrown at us” by Boeing without prior negotiations. The company, meanwhile, said it had presented the offer to the union and then to workers.
Finding a solution to the strike, which began after workers rejected an earlier compensation package earlier this month, has become critical for Boeing. Analysts have pointed out that a prolonged work stoppage could further strain the company’s finances at a time when it is already facing production delays and increased scrutiny over its safety record.
- Chinese stocks soar on stimulus
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite rose more than 4 percent on Tuesday, while Hong Kong’s Hang Seng index also rallied after new stimulus measures from Beijing.
Chinese officials unveiled a series of planned measures to further boost economic growth, with the People’s Bank of China (PBOC) set to cut bank reserve requirements by 50 basis points to unlock more liquidity.
For the troubled property market, the government said it would lower mortgage rates on existing loans. Bloomberg reported that the government planned at least 500 billion yuan ($70.8 billion) to support the liquidity of local stocks.
The moves come after the PBOC cut its short-term repo rate on Monday in an effort to further boost liquidity. Officials in China are pushing to shore up growth as the world’s second-largest economy struggles with persistent deflation and a prolonged housing slump.
- Increase in crude oil
Crude prices rose on Tuesday, boosted by monetary stimulus from top importer China, as well as escalating tensions in the Middle East.
By 03:23 GMT, Brent was up 1.2% at $74.08 a barrel, while U.S. crude (WTI) futures were trading 1.4% higher at $71.34 a barrel. .
China’s sweeping stimulus measures boosted hopes of expanding crude demand from the world’s biggest importer.
Elsewhere, Israel’s military said it launched airstrikes against Hezbollah facilities in Lebanon on Monday, raising fears of a disruption in supplies from the oil-rich region, tightening global markets.
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Reference;
Kanowsky, S. (2024) Fed’s Bowman to speak, Boeing’s new pay offer – what’s moving markets By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/economy/feds-bowman-to-speak-boeings-new-pay-offer–whats-moving-markets-3629102 (Accessed: 24 September 2024).
