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Futures muted, U.S. retail and Fedspeak ahead this week - what's moving markets

Published 17/06/2024, 10:28
© Reuters

Investing.com -- U.S. stock futures were muted heading into the start of a new trading week, with traders awaiting new economic data and fresh interest rate commentary from a raft of Federal Reserve officials. Activist investor Starboard Value reportedly takes a stake in design-software group Autodesk (NASDAQ:ADSK) worth around $500 million, according to the Wall Street Journal. Elsewhere, Chinese industrial output growth cooled by more than expected in May, in an indication of the challenges facing Beijing's effort to fuel a recovery in the country's economy.

1. Futures muted

U.S. stock futures were muted on Monday, as investors looked ahead to further economic data and comments from Federal Reserve policymakers this week that could impact how the central bank may approach potential interest rate reductions later in 2024 (more below).

By 03:15 ET (07:15 GMT), the Dow futures contract was mostly unchanged, Nasdaq 100 futures had added 31 points or 0.1%, and S&P 500 futures had inched up by 3 points or 0.1%.

The Nasdaq Composite edged up slightly on Friday, giving the tech-heavy index a fifth-consecutive record close. The benchmark S&P 500 and blue-chip Dow Jones Industrial Average both ended the session slightly lower.

In individual stocks, shares in Adobe (NASDAQ:ADBE) spiked by more than 14% after the Photoshop-maker lifted its annual revenue forecast thanks to increasing demand for its artificial intelligence-fueled products. AI chipmaker Nvidia (NASDAQ:NVDA), which briefly topped iPhone-manufacturer Apple (NASDAQ:AAPL) as the world's second-largest company, also gained 1.8%.

2. U.S. retail sales, Fedspeak ahead this week

Investors trying to get a handle on the strength of the U.S. economy -- and the timing of Fed rate cuts -- will be looking closely at Tuesday’s retail sales data for May.

Economists are expecting retail sales to have risen 0.3% month-on-month, after the figure came in at 0.0% in April, lower than projections.

Consumer spending is an area of focus for Wall Street as investors seek to gauge the impact of higher interest rates on the economy. Last week, the Fed reiterated that it needs to see more evidence that inflation is sustainably cooling down to its stated 2% target before beginning to lower borrowing costs.

Traders will also get the chance to hear from several Fed speakers during the week, including New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, San Francisco Fed President Mary Daly and Richmond Fed President Thomas Barkin. On Friday, Chicago Fed President Austan Goolsbee said that while he felt "a little bit of relief" that price pressures in the U.S. showed signs of abating in May, he would like to see "more months" of similarly easing data prior to slashing rates.

3. Starboard Value takes stake in Autodesk - WSJ

Activist investor Starboard Value has acquired a stake worth approximately $500 million in design-software manufacturer Autodesk and is now advocating for changes within the company, according to the Wall Street Journal.

Citing sources familiar with the matter, the WSJ said Starboard has held meetings with Autodesk executives in the past few weeks to express their concerns and suggest changes, including enhancing its margins, implementing changes to its board and the management of a recent accounting investigation that negatively impacted the stock.

Starboard criticized Autodesk for failing to disclose the probe and other significant updates until after the deadline for shareholders to nominate director candidates had passed in late March, the WSJ added.

The investor is reportedly contemplating legal action to request the reopening of Autodesk's director nomination window and to postpone the company's annual shareholder meeting, which is currently scheduled for July 16.

4. Chinese industrial output slows

Chinese industrial production eased by more than exected in May, while property prices also dropped, in the latest sign of struggle in Beijing's effort to bolster the world's second-biggest economy.

Industrial output increased by 5.6% last month on an annualized basis, decelerating from 6.7% in April, according to data from the National Bureau of Statistics. Economists had seen the reading at 6.2%.

Meanwhile, Chinese new home prices slipped by 0.7% month-on-month, official data cited by Reuters showed. It was the sharpest decline since 2014. Property investment and residential property sales also tumbled.

The figures emphasize the challenges facing Chinese lawmakers as they look to reinvigorate the country's economy. Beijing has reportedly pushed to boost industrial production, particularly through exports, during a time of depressed real estate market activity.

5. Oil steadies

Oil prices steadied on Monday, as traders digested the industrial production data out of China and a survey last week that suggested a slowdown in demand in top crude consumer the United States.

On Friday, U.S. consumer sentiment slumped to a seven-month low in June, as households continued to fret about elevated inflation and high borrowing costs.

Meanwhile, the lower-than-predicted industrial production figures in May pointed to an uneven recovery in the world's biggest oil importer.

By 05:13 ET, Brent crude futures had gained 0.3% to $82.88 a barrel, while U.S. West Texas Intermediate crude futures had increased by 0.3% to $78.29 per barrel.

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