📈 What's Moving Markets?

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This week, U.S. stock futures are dipping ahead of a pivotal Federal Reserve decision and fresh inflation data, following a strong jobs report that has everyone guessing if the Fed will ease up or tighten the screws. With interest rates at a two-decade high, the Fed’s hints about future cuts are the real game-changers.

Wednesday's new inflation figures and Elliott Investment's $2 billion stake in Southwest Airlines, aiming to reverse the carrier's fortunes, add to the intrigue. Crude prices are inching up, but caution prevails with OPEC and IEA reports looming.

Grab your coffee and let's get into it! ☕️👇️

Markets

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BUSINESS

What’s Moving Markets This Week?

U.S. stock futures are slipping as the market gears up for a pivotal week. With a major Federal Reserve interest rate decision and critical inflation data on the horizon, the stage is set for some serious market action.

• Dow futures down 0.2%, S&P 500 futures off by 0.1%, and Nasdaq 100 futures dropping 0.3% by early Monday.

• Last week's choppy trading was spurred by a stronger-than-expected jobs report, reigniting concerns about prolonged Fed rate hikes.

• Despite this, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average still managed to post weekly gains.

Investors are clearly on edge, wondering if the Fed will finally start to ease its grip on borrowing costs or if more economic turbulence is in store.

The Fed's Next Move: Hold or Fold?

All eyes are on the Federal Reserve this week as markets widely expect the Fed to maintain interest rates at their current two-decade highs. But the real story lies in what the Fed hints at for the future.

• Fed's dot plot update: Officials are now eyeing two 25-basis point cuts this year, down from the three projected in March.

• Inflation watch: Fed officials want more solid evidence of inflation cooling towards the 2% target before any cuts.

With inflation still above the desired level, the central bank's next steps could have significant implications for the economy and your investments.

Inflation Data and Elliott's Bold Bet on Southwest Airlines

Wednesday is set to be a double whammy with the release of fresh U.S. inflation figures just hours before the Fed's decision. This data could be a crucial indicator for the Fed's policy direction.

• Economists' forecast: Annualized headline price growth in May expected to match April's pace, with a slight deceleration in the core reading.

• Wall Street's focus: The numbers will offer insights into whether the Fed will adjust rates in September, with a current 53% chance of a cut.

Meanwhile, in the airline industry, Elliott Investment Management has taken a nearly $2 billion stake in Southwest Airlines, aiming to spur a turnaround in the carrier's performance.

• Southwest struggles: Shares are down nearly 4% in 2024, and the airline is still below its March 2020 level.

• Challenges: Higher costs from new labor contracts and delivery delays from Boeing have compounded the woes post-COVID.

Crude Oil: A Steady Climb Amid Market Uncertainty

Crude prices are showing some resilience, inching higher after three weeks of losses. This is ahead of key reports from OPEC and the International Energy Agency (IEA) and the Fed's latest meeting.

• U.S. crude futures up 0.3%, Brent crude up 0.4% early Monday.

• Market focus: OPEC's monthly report on Tuesday and the IEA's report later in the week will be critical.

Despite the recent uptick, the market remains cautious, with worries about rising global supply as OPEC+ plans to unwind production cuts from October.

As we navigate this week, keep a close eye on these developments. They could offer pivotal insights and opportunities for your investment strategy. Stay tuned and stay sharp!

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