Stock futures were higher on Monday after declines in the previous trading session for the three major U.S. indices, with investors focusing on a prolific week in Washington that includes the latest Reserve policy meeting Federal Council of 2021 and the release of New Retail Impressions. sales, housing starts and other economic data.
Contracts on the S&P 500 edged higher, turning positive after the blue chip index pulled back from a rally last week that helped the index post its biggest gains since February. Goldman Sachs research has shown that the S&P 500 is powered by five stocks that have accounted for 51% of its return since the end of April. Microsoft, Google, Apple, Nvidia and Tesla account for more than a third of the S&P 500’s 26% return this year, according to Goldman.
Futures for the Dow and Nasdaq were also up.
Traders await a decision from the Fed on how quickly the central bank will tighten monetary policy amid new inflation figures that reflect the fastest annual rise in nearly four decades. The Labor Department’s Consumer Price Index (CPI) climbed 6.8% in November from a year ago, according to figures released last week.
The Federal Open Market Committee (FOMC) is due to hold its two-day meeting to set policy starting Tuesday, followed by the release of the monetary policy statement and remarks by Federal Reserve Chairman Jerome Powell on Wednesday. An updated summary of economic projections outlining each member’s outlook for economic conditions and interest rates is attached to the statement.
The Fed has been under pressure to control rising inflation levels, as investors watch for signs of a faster decline that could set the stage for earlier rate hikes.
âBecause inflation expectations appear to be adaptive, our view is that the longer inflation stays high, the greater the risk that consumers will adjust their behaviors in a way that contributes to persistently high inflation,â he wrote. ‘PIMCO economist Tiffany Wilding in a recent note to customers.
“We believe the Fed will want to manage this risk by shortening the time frame during which it cuts its purchases of US Treasuries and agency mortgage-backed securities (MBS), with the goal of ending the program in March. 2022, while also reporting a June rate. hike is likely, âWilding said.
PIMCO Managing Director and Portfolio Manager Sonali Pier also separately told Yahoo Finance Live that the company expects to see two hikes in 2022, three hikes in 2023, and potentially four in 2024, as the Fed tries to bring the policy rate to neutral.
“Amid proliferating signs of solid growth and a robust labor market, various metrics describe a deeply troubled economy,” Oxford Economics senior economist Bob Schwartz wrote in a new report. “Households are gloomy, according to opinion polls, and the so-called ‘misery index“That adds up inflation and unemployment hovers around recession levels.”
Markets are waiting for a wealth of new economic data this week. Retail sales for November, released on Wednesday, are expected to rise 0.8%, according to Bloomberg consensus estimates. And November housing starts are expected to increase 3.3% month over month.
Meanwhile, Morgan Stanley predicts the U.S. unemployment rate will drop to 3% in 2022.
“It’s amazing how much the rate has fallen over the past five months,” Morgan chief US economist Michael Feroli told Yahoo Finance Live. âWe expect this rate of decline to slow down, but it doesn’t take much to get below 4%, even with a slight uptick in the labor participation rate that has been depressed over the past year. and a half.”
6:00 p.m. ET: Stock futures are on the rise
Here are the main market movements at the end of Monday’s session:
S&P 500 in the long term (ES = F): +5.50 points (0.12%), at 4,674.25
Dow Futures (YM = F): +46.00 points (0.13%), at 35,691
Futures contracts on the Nasdaq (NQ = F): +10.75 points (0.07%) at 16,092.75
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on twitter @alexandraandnyc
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