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U.S. futures weaken as investors brace for renewed inflation

The Elite Times TeamBy No Comments4 Mins Read

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U.S. stock futures took a breather Monday after a whirlwind week ended at a record high. Investors were bracing for an impending inflation update that could test the bull market.

Futures for the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) hit new highs at the close, then swung below the flatline. After a great week for tech stocks, the Nasdaq 100 (^NDX) contract was little changed.

New inflation data released in the coming days will test the sustainability of the bull market following Nvidia’s (NVDA) results. The better-than-expected CPI report spooked markets and triggered a selloff in early February, and investors are already weighing the possibility that Thursday’s PCE index reading could be a surprise.

Given that the PCE index is the Fed’s preferred inflation measure, it will factor in the ongoing debate over the timing of the already-delayed rate cut.

read more: Impact of Fed interest rate decisions on bank accounts, CDs, loans, and credit cards

Inflation reports are the highlight of this week’s data, as are temperature checks for consumers and manufacturers. What they say about the health of the U.S. economy may determine whether the bullish mood in stocks continues.

Berkshire Hathaway (BRK-B) is approaching a $1 trillion market cap after Warren Buffett’s conglomerate posted record annual profits for the second year in a row. Buffett said in his annual letter to shareholders over the weekend that Berkshire was “built to last” and paid tribute to the role his right-hand man Charlie Munger played in it. .

In other areas of corporate performance, Domino’s Pizza (DPZ) shares soared after the company raised its dividend and beat fourth-quarter sales estimates.

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  • Surprising statistics from the broader market rally

    The overall market continues to perform impressively, driven by excitement about AI stocks.

    A research team at Deutsche Bank has released some numbers behind all this ahead of today’s opening bell. And it’s close to amazing.

    • The S&P 500 has risen in 15 of the past 17 weeks. Something like this has only happened once in the past 50 years, in 1989.

    • If the S&P 500 index ends this week in positive territory, it will have been positive for 16 out of 18 weeks. The last time it happened was in 1971, just before the end of the Bretton Woods system. According to Deutsche Bank, 16 out of 18 weeks were positive, marking a joint record since the index was created.

    With this rally, Deutsche Bank highlighted several areas where the market rally looks vulnerable.

    Before hearing from a number of Fed speakers this week and getting important readings on the PCE index, one in particular caught my attention.

    “Sustained inflation could be a problem for markets, as it would force central banks to keep interest rates high for longer periods of time. On the upside, the S&P 500 fell -1.37% on the day.”So this is a theme that the market remains vulnerable to,” said Henry Allen, a strategist at Deutsche Bank.

  • Key quotes from Mr. Buffett’s annual letter

    Berkshire Hathaway (BRK-B) is up 5% post-earnings and priced at $435 pre-market on Yahoo Finance’s trend ticker page. The company is inching closer to a $1 trillion market cap for the first time after Friday’s closing price of $905 billion.

    Makes sense to me.

    Mr. Buffett has been organizing upfront investments in Japan, collecting huge dividends from Coca Coca (KO) and American Express (AXP), and has a record $167.6 billion in cash. . Indeed, Buffett struck a cautious tone toward those investing in the rail sector (due to the strict regulations and intensive capital investment required) and, to a lesser extent, the energy sector. .

    But for me, this was one of Buffett’s best annual letters in a decade. Because Buffett has shared some sharp investing wisdom with a world currently obsessed with his AI stocks like Nvidia (NVDA).

    Buffett has a few reminders to start your week.

    1. “Our goal at Berkshire is simple: We want to own all or part of the following businesses: Enjoy fundamental and lasting economic benefits”

    2. “Especially in the Berkshires. Prefers rare companies that can provide additional capital with high future returns.. You can create almost untold wealth by owning just one of these companies and just sitting around.”

    3. “The stock market is much bigger than it was in our early days; Today’s engaged participants are no more emotionally stable or better at teaching than they were when I was in school.. Whatever the reason, the market now behaves much more like a casino than it did when I was younger. Casinos are now installed in many homes, tempting residents every day. ”

    4. “one investment rule At Berkshire, we always have been, and always will be. Don’t risk losing your capital forever”

    5. “While we did not foresee a period of economic paralysis, was always ready”

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