Futures edge higher as prospect of Sept rate cut grows
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[August 22, 2024] (Reuters)
- U.S. stock index futures were marginally higher on Thursday, as
sentiment remained upbeat about the Federal Reserve possibly kicking off
its policy easing cycle next month, with focus now shifting to
policymakers' commentary at Jackson Hole this week.
Hopes that the Fed would cut interest rates next month got a boost after
minutes from the U.S. central bank's latest meeting showed on Wednesday
a "vast majority" of officials said such an action was likely.
The July policy meeting occurred before the disappointing employment
report for that month and a host of economic reports pointing to cooling
inflation and a softening but resilient economy.
"The minutes are backward-looking but confirm the soft signals from Fed
Chair Powell after the meeting," noted Elisabet Kopelman, U.S. economist
at banking group SEB.
"These plans should have received further support from weak data since
the July meeting, and we expect Powell to send a clear signal on this in
his speech in Jackson Hole tomorrow."
The much-awaited Jackson Hole Economic Symposium kicks off later in the
day, with Fed chair Powell slated to deliver remarks on Friday.
Money markets currently see a 69.5% chance of an at least 25-basis-point
(bps) cut in September, as per the CME FedWatch Tool and about 100 bps
of easing by December, according to LSEG data.
Wall Street's main indexes closed slightly higher in the previous
session, with the S&P 500 now sitting less than 1% away from its
all-time highs seen in July.
Later in the day, a weekly reading of U.S. jobless claims is due at 8:30
a.m ET, and preliminary estimates of August U.S. business activity are
due at 9:45 a.m. ET.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., August 8, 2024. REUTERS/Brendan McDermid/File
Photo
At 05:10 a.m. ET, Dow E-minis were up 50 points, or 0.12%, S&P 500
E-minis were up 5 points, or 0.09% and Nasdaq 100 E-minis were up
13.25 points, or 0.06%.
Among individual stocks, data cloud analytics firm Snowflake raised
its forecast for full-year product revenue. Still, Snowflake's
shares were down 8.5% in premarket trading with analysts attributing
the drop to the company not pairing the climb in revenue projections
with a rise in margin forecast.
Paramount Global gained 3.3% after a source told Reuters that
veteran media executive Edgar Bronfman has sweetened his bid to take
over the company, offering $6 billion for its controlling
shareholder National Amusements and a minority stake in Paramount.
Shares of Charles Schwab were down nearly 4% after Canada's TD Bank
Group said it would sell part of its stake in the brokerage firm.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Sherry
Jacob-Phillips)
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