FMP

FMP

Enter

U.S. stock futures edged lower on Monday, as investors brace for a crucial week marked by the Federal Reserve's interest rate decision and key inflation data. A

us stock

U.S. Stock Futures Lower as Fed Decision and Inflation Data Loom

-

twitterlinkedinfacebook
blog post cover photo

Image credit: Joshua Mayo

U.S. stock futures edged lower on Monday, as investors brace for a crucial week marked by the Federal Reserve's interest rate decision and key inflation data. Additionally, news of Elliott Investment Management taking a significant stake in Southwest Airlines has caught market attention.

1. Futures Lower

U.S. stock futures indicated a weaker start to the week, with Dow futures down 87 points, or 0.2%, S&P 500 futures slipping 6 points, or 0.1%, and Nasdaq 100 futures falling by 43 points, or 0.3% as of 03:46 ET (07:46 GMT). This follows a volatile prior session where a stronger-than-expected jobs report raised concerns about the Fed delaying rate cuts longer than anticipated. Despite this, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posted weekly gains.

2. Fed Decision This Week

The Federal Reserve is widely expected to maintain current borrowing costs at over two-decade highs during its policy meeting concluding on Wednesday. The focus will be on any signals regarding future rate changes, particularly in the updated dot plot, which is expected to indicate two 25-basis point cuts this year, down from three projected in March.

Several Fed officials have emphasized the need for more evidence of sustained cooling in inflation towards the 2% target before initiating rate cuts. While price gains have moderated following aggressive rate hikes starting in 2022, they remain above the target level.

3. May Inflation Data Due Out This Week

New U.S. inflation data is set to be released just hours before the Fed's decision on Wednesday. Economists expect annualized headline inflation for May to match the previous month's pace but show a slowdown on a monthly basis. The core inflation rate, excluding volatile items like food and fuel, is projected to decelerate slightly year-on-year while remaining consistent with April's month-on-month rate.

These figures will be crucial for Wall Street, offering insights into the Fed's potential policy path later in the year. According to CME Group's FedWatch Tool, there is currently about a 53% chance that the Fed will begin lowering rates from 5.25% to 5.5% as early as September.

4. Elliott Takes Almost $2 Billion Stake in Southwest Airlines - WSJ

Elliott Investment Management has acquired nearly $2 billion in Southwest Airlines shares and plans to push for changes to improve the carrier's performance, as reported by the Wall Street Journal on Sunday. This move makes Elliott one of the largest shareholders in Southwest, whose stock has fallen nearly 4% in 2024 and remains below its pre-pandemic level from March 2020.


Unlock Market Insights with Discounted Cash Flow Analysis
Stay ahead of the market with in-depth DCF analysis. Evaluate the true value of your investments based on expected future cash flows. Learn More

Other Blogs

Nov 25, 2023 6:39 AM - Parth Sanghvi

DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method

Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...

blog post title

Dec 23, 2023 2:19 AM - Parth Sanghvi

Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges

Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...

blog post title

Dec 25, 2023 2:28 AM - Parth Sanghvi

Integrating Sustainability into Valuations: Navigating ESG Factors within the Discounted Cash Flow (DCF) Model

Introduction: The investment landscape is undergoing a profound shift with a heightened emphasis on sustainability and responsible investing. In this blog post, we explore the intersection of Environmental, Social, and Governance (ESG) considerations within the Discounted Cash Flow (DCF) model, h...

blog post title
FMP

FMP

Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
twitterlinkedinfacebookinstagram
2017-2024 © Financial Modeling Prep