Investors this week await the release of first-quarter results from the largest companies in the U.S. market and analyze interest rate signals following robust economic data in recent days. Federal Reserve (Fed) Chairman Jerome Powell says the Fed will be cautious about possible interest rate cuts.
Boeing (B.A.) has warned of a new problem with its 737 model aircraft. Here is everything you need to know to start the week.
Futures are down
U.S. stock futures experienced a decline in prices on Monday as traders expect the results of major U.S. companies this week to shake prices while the market is digesting the most recent statements by the Chairman of the Federal Reserve regarding interest rates.
Major market indexes positively ended Friday’s trading day, boosted by a stronger-than-expected January labor market report. However, the data delayed the expected economic calendar regarding possible interest rate cuts. They thus boosted U.S. Treasury yields, which many investors welcomed as a sign of resilience from the world’s most powerful economy.
On the same day, shares of both Amazon (AMZN) and Meta Platforms (META) rose. For example, Meta’s shares recorded the largest intraday rally in its history, 20.3%, which increased its market capitalization to close to 1.2 trillion.
The imminent release of results
The resilience of the stock market rally is likely to be tested this week when a group of large U.S. companies release their quarterly results.
Companies such as McDonald Corporation (MCD) and Caterpillar (CAT) will release their results this week, which will most likely impact the stock market in some way.
It remains to be seen whether the release of this data will be affected by U.S. inflation, which is still at the levels expected by the Federal Reserve. It will also be necessary to analyze how the major market indexes, such as the S&P 500, compare.
Fed Chairman Jerome Powell says to be cautious about rate cuts
For now, the U.S. economy will take a careful approach. All investors were expecting the possibility of a rate cut, although for now, it is not possible, and as long as inflation does not reach 2%, it will not be possible.
According to the president, prudent monetary policy seeks to avoid the risk of reigniting the rise in prices by lowering interest rates too quickly. The previous week, the Federal Reserve held rates of 5.25% and 5.50%. Finally, the President emphasized that a reduction in inflation is necessary before any interest rate cuts can be considered.
Boeing states that a new airframe problem could cause delays in 737 deliveries
Boeing shares are trading lower on Monday after the aircraft manufacturer reported some problems with the fuselage of its 737s, which could lead to delays in its delivery commitments.
In a statement sent to employees on Sunday, Boeing Commercial Airplanes president Stan Deal reported that two holes on these models may not have been drilled according to the company’s requirements.
Although the president stated that this problem is not an immediate concern regarding flight safety and also reported that all 737 can continue to operate safely, he admitted that corrections should be made on about 50 aircraft that still need to be delivered.
Crude oil prices remain volatile and directionless
Crude oil prices show signs of volatility on Monday, with investors continuing to watch for a delay in possible interest rate cuts by the Fed along with the escalating conflict in the Middle East.
For now, U.S. crude oil prices are down about 0.3% and are trading at $72.08 per barrel, while the Brent contract is down approximately 0.2% and is trading at $77.21 per barrel. Recently, the United States had to adjust its oil forecasts downward, influenced by the strong U.S. employment report numbers and escalating tensions in the Red Sea.
