All Eyes on Personal Consumption Expenditure Data
All eyes are now focused on the personal consumption expenditure data, which is the Federal Reserve’s preferred measure of inflation. It is scheduled to be released at 8:30 a.m. This data will exclude volatile items such as food and energy. Analysts expect core prices to have registered a 3.3% growth last month. This would represent a slight decrease from the 3.5% growth observed in October.
Positive Momentum for Stock Indexes
The three major indexes are on track to achieve their eighth consecutive week of gains. The S&P 500 is poised for its longest winning streak since 2017, while the Nasdaq and the Dow are set to achieve their longest streaks since 2019. The rally gained significant momentum last week after the Federal Reserve acknowledged that inflation was approaching the target rate. This acknowledgment brought the possibility of interest rate cuts into the spotlight. Traders are now predicting an 83.7% chance of a 25 basis point rate cut in March next year. Furthermore, they expect borrowing costs to decrease by 125 basis points by September 2024, according to the CME FedWatch Tool.
Unfavorable Outlook for Nike, Impact on Other Sportswear Firms
Before the opening bell, Nike (NYSE:NKE) experienced a significant downturn of 11.9%. The sportswear giant reduced its annual sales forecast, citing cautious consumer spending, weaker online business, and increased promotional activities. Additionally, Nike plans to reduce supplies of key product lines in order to manage costs. This downturn had a ripple effect on other sportswear companies. Lululemon Athletica (NASDAQ:LULU), Foot locker, and DICK’S Sporting Goods also witnessed declines of between 2.6% and 6.9% in thin trading conditions.
Early Morning Trading Figures
As of 5:46 a.m. ET, Dow e-minis were down 120 points or 0.32%, S&P 500 e-minis were down 4.5 points or 0.09%, and Nasdaq 100 e-minis were down 28.75 points or 0.17%.
Chinese Gaming Firms Experience Significant Declines
U.S.-listed shares of Chinese gaming companies NetEase (NASDAQ:NTES) and Bilibili (NASDAQ:BILI) suffered losses of 23.2% and 10.7%, respectively. These declines were prompted by Chinese regulators announcing a series of rules aimed at curbing spending and discouraging rewards within the video game industry.
Occidental Petroleum Receives Boost from Berkshire Hathaway
On a positive note, Occidental Petroleum (NYSE:OXY) saw a rise of 0.8% after Warren Buffet-led Berkshire Hathaway (NYSE:BRKa) increased its stake in the oil firm. This move brings Berkshire Hathaway’s stake closer to 28%.