US stocks pushed further into record territory on Monday as investors awaited US inflation data and other major economic releases due this week.
Surging share prices of tech titans Amazon, Apple and Microsoft following a strong earnings season have propelled Wall Street’s main indices to new summits in recent weeks, but attention this week returns to interest rates.
The US Federal Reserve has indicated it will likely begin to cut interest rates — which it began to hike in 2022 to tame surging inflation — later this year as the pace of price rises return closer to its 2.0 percent target.
That has heightened the attention of investors to US inflation data, and Wall Street pushed further into record territory ahead of Tuesday’s US consumer price index (CPI) data for January.
Revised data released on Friday showing the CPI cooling in December has added to optimism that the Federal Reserve is on course to bring inflation under control, although observers are sceptical as to whether officials would cut US interest rates as early as markets expect.
“Indices will be waiting patiently for tomorrow’s US inflation data, with market predictions of a sharp… decline in the headline (January) CPI figure providing a potential tailwind for equities,” noted Joshua Mahony, chief market analyst at trading group Scope Markets.
While annual inflation is expected to have dropped to 2.9 percent in January, Matthew Weller at FOREX.com and City Index noted that survey data suggests inflation may pick up again in the coming months.
“This is no doubt a concern for the Fed and may lead to a smaller-than-expected reaction even if this week’s (lagging) CPI reading comes in below expectations,” he wrote in a note to clients.
A regular survey by the New York Fed of consumers released on Monday was reassuring, finding their inflation expectations steady while those concerning wages and access to credit improved.
In Europe, eurozone stocks pushed higher while London was flat ahead of UK inflation, GDP, retail sales and employment data to be released later this week.
Another record close for the S&P 500 in New York on Friday did little to inspire buying Monday, with key markets in Asia shut for the Lunar New Year break.
Sydney, Bangkok, Mumbai and Wellington ended lower Monday — while Jakarta and Manila edged higher.
Tokyo, Hong Kong, Shanghai, Taipei, Seoul, Singapore and Kuala Lumpur were closed for the regional holiday season.
Oil prices fell before key market updates from the Organisation of Petroleum Exporting Countries and International Energy Agency.
“This week sees both OPEC and the IEA release their latest monthly reports, with markets keeping a close eye out for any updated supply and demand forecasts,” said analyst Mahony.
The IEA energy watchdog last month forecast world oil supplies to rise further this year as sliding demand growth amid China’s economic weakness offsets fears of a wider conflict in the crude-rich Middle East.
– Key figures around 1630 GMT –
New York – Dow: UP 0.4 percent at 38,831.85 points
New York – S&P 500: UP 0.3 percent at 5,042.43
New York – Nasdaq Composite: UP 0.4 percent at 16,055.54
London – FTSE 100: FLAT at 7,573.69 (close)
Paris – CAC 40: UP 0.6 percent at 7,669.80 (close)
Frankfurt – DAX: UP 0.7 percent at 17,037.35 (close)
EURO STOXX 50: UP 0.7 percent at 4,746.35 (close)
Tokyo – Nikkei 225: Closed for holiday
Hong Kong – Hang Seng Index: Closed for holiday
Shanghai – Composite: Closed for holiday
Euro/dollar: DOWN at $1.0778 from $1.0789 on Friday
Dollar/yen: UP at 149.39 yen from 149.26 yen
Pound/dollar: DOWN at $1.2626 from $1.2631
Euro/pound: DOWN at 85.33 pence from 85.40 pence
West Texas Intermediate: DOWN 0.3 percent at $76.60 per barrel
Brent North Sea Crude: DOWN 0.6 percent at $81.67 per barrel