US futures
Dow futures -0.12%, S&P futures 0.02% & Nasdaq futures 0.02%
In Europe
FTSE -0.12% & DAX 0.76%
- Stocks stall ahead of core PCE data
- The Fed’s preferred gauge for inflation is expected to hold at 2.9%
- Fed rate cut expectations remain high at 87%
- Oil rises across the week as Russian Ukraine talks stall
Stocks flat ahead of core PCE
US stocks are pointing to a muted open as investors eye the first key inflation report since the government shutdown.
Traders are pricing in an 87% chance that the Federal Reserve will lower borrowing costs by 25 basis points when it meets next week.
Attention is on core PCE, the Fed's preferred inflation gauge, the first major data release following a 43-day government shutdown that froze official statistics.
Expectations are for the core PC to hold at 2.9%, in line with August's reading, and for monthly gains to be 0.2%.
The data comes ahead of next week's Fed meeting, where policymakers will debate whether to reduce borrowing costs amid a weakening labour market and still-persistent price pressures.
In addition to core PCE, attention will also be on the University of Michigan confidence and consumer inflation expectations.
Corporate news
Netflix is modestly lower after agreeing to buy Warner Bros. Discovery in a cash-and-stock transaction valued at $27.75 per share, giving the deal a total value of $82.7 billion. This comes after a weeks-long bidding war, with Netflix outbidding Paramount's Skydance offer of $24.00. The transaction could close in 12 to 18 months, transforming Netflix into a dominant player in Hollywood and giving it one of the largest content libraries. The deal will likely face strong antitrust scrutiny in Europe and the US, as it gives the world's largest streaming service ownership of its rival, which has nearly 130 million streaming subscribers. Warner Bros. Disc. is trading 4% higher pre-market.
S&P 500 forecast – technical analysis.
The S&P 500 recovered from the 6500 November 20 low, rising back into the rising channel. Bulls will look to extend gains towards 6920 and fresh record highs. Support can be seen at 6760, the October 8 high, and the 50 SMA. A break below here opens the door to 6500 and the November low.
FX markets – USD flat, GBP/USD gains
The U.S. dollar is unchanged on Friday but is set to fall across the week, driven lower by expectations of a December Fed rate cut. Attention turns to US core PCE for further clarity on the outlook for rates.
EUR/USD is unchanged and on track to rise 0.45% this week, marking the second straight week of gains. Today, GDP data showed the eurozone grew at a slightly stronger-than-expected pace in Q3, at 0.3% quarter on quarter, up from 0.2% in the preliminary reading.
GBP/USD is heading higher and is on track for weekly gains amid USD weakness, and as the post-budget rally can continue for a second week. Still, gains are likely to be limited given that the Bank of England is set to cut rates again this month.
Oil rises across the week as Russia-Ukraine peace talks stall
Oil is unchanged on Friday after solid gains yesterday and is on track to rise 1.5% across the week.
The price has been boosted this week by stalled Russia-Ukraine peace talks, which mean Russian sanctions will remain in place for now, providing a bullish backdrop for oil prices. Meanwhile, OPEC supply continues to put downward pressure on oil prices.
The market is also weighing up the prospect of a Fed rate cut, which could provide a tailwind to oil prices.
