Futures edge lower; economic data, earnings this week - what's moving markets

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Futures edge lower; economic data, earnings this week -  what's moving markets
Credit: © Reuters.

Investing.com -- U.S. futures point to a lower start on Monday, with traders looking ahead to key economic data releases later in the week and a slate of corporate earnings. Warren Buffett moves to reassure investors over the resilience of Berkshire Hathaway (NYSE: BRKa ) and remembers the conglomerate's late vice chairman Charlie Munger. Elsewhere, Ant Group reportedly offers a higher bid than Ken Griffin's market-making firm Citadel Securities for Credit Suisse's Chinese investment banking division.

1. Futures lower

U.S. stock futures edged lower on Monday, as investors eyed the staying power of an artificial intelligence-fueled tech rally and the prospect of delayed Federal Reserve interest rate cuts.

By 03:11 ET (08:11 GMT), the S&P 500 futures contract had shed 8 points or 0.2%, Nasdaq 100 futures had dipped by 43 points or 0.2%, and Dow futures had lost 35 points or 0.1%.

The main averages on Wall Street were mixed on Friday. The benchmark S&P 500 and blue-chip Dow Jones Industrial Average both edged up to fresh record closing highs, buoyed in part by ongoing strength in AI-darling Nvidia (NASDAQ: NVDA ). The chip designer's market capitalization briefly crested $2 trillion for the first time in the prior session.

Despite a modest dip in the tech heavy Nasdaq Composite , all three of the indices ended the week higher.

2. U.S. inflation data, more earnings ahead this week

U.S. inflation will likely remain a key focus for markets this week, particularly when January's personal consumption expenditures price data is released on Thursday.

Recent economic figures have pointed to sticky price gains in the world's largest economy, a prospect that has greatly extinguished bets that the Fed will move imminently to bring interest rates down from more than two-decade highs. The central bank has previously embarked on a tightening campaign designed to ease inflation to its 2% target, and although prices have cooled, they are still above this mark.

In an interview published on Friday, New York Fed President John Williams sounded some caution around early rate cuts, saying that the Fed is on track to reduce borrowing costs "later this year."

The weekly economic calendar also features data on durable goods orders, the ISM manufacturing purchasing managers' index, readings on new and pending home sales, as well as reports on consumer confidence from the Conference Board and the University of Michigan.

On the earnings front, DIY retailer Lowe's (NYSE: LOW ), cloud software group Salesforce (NYSE: CRM ), and tech company Dell Technologies (NYSE: DELL ) are due to report this week.

3. Buffett reassures investors, remembers Charlie Munger

Billionaire investment icon Warren Buffett told investors that his $900 billion conglomerate Berkshire Hathaway is "built to last" through even the worst financial disasters.

But in his closely-watched annual shareholder letter released over the weekend, Buffett noted that Berkshire's share price will likely not see any "eye-popping" performances due to its already massive size. He added that only a handful of firms are capable of "moving the needle" at Berkshire, "and they have been endlessly picked over by us and by others."

Berkshire posted a record $37.4 billion in operating profit in 2023, bolstered by a 28% jump in fourth-quarter income to $8.48 billion.

Buffett also took time to honor his long-time colleague Charlie Munger, who passed away in November at the age of 99. Buffett called Munger the "architect" of Berkshire.

4. Ant Group outbids Citadel for Credit Suisse's China unit - Bloomberg

Jack Ma-backed fintech Ant Group outbid Citadel Securities for Credit Suisse’s investment bank unit in China in a move that is expected to attract a heavy dose of regulatory scrutiny, Bloomberg reported on Monday.

Ant is looking to build a securities business using the division, although people familiar with the matter told Bloomberg that Chinese authorities will be more inclined to favor a foreign buyer for the unit.

The Bloomberg report did not specify the value of Ant’s bid. Citadel, founded by billionaire Ken Griffin, had reportedly offered between 1.5 billion yuan ($210 million) to 2 billion yuan for the business in late-2023.

Ant’s approach may present some trouble for Swiss bank UBS Group AG (NYSE: UBS ) (SIX:UBSG), which took over smaller peer Credit Suisse last year. UBS must find a buyer for the Chinese unit, given that it already controls a securities firm in China and cannot hold two licenses in the same business, Bloomberg reported.

5. Oil prices dip

Oil prices fell in European trade on Monday, extending steep losses from the prior session that were driven by uncertainty over demand.

Traders are focused on a string of key economic readings this week, as well as more signals from the Federal Reserve on the path of interest rates.

Worries over slowing demand, especially after recently hawkish signals from the Fed, were a key weight on crude prices last week, dragging them down by about 3% lower on Friday and also wiping out all gains for the week. These concerns largely outweighed signs of continued geopolitical instability in the Middle East, which have exacerbated fears of supply disruptions, offering some support to oil prices.

Brent oil futures expiring in April fell 0.5% to $81.23 a barrel, while West Texas Intermediate crude futures dropped 0.5% to $75.70 per barrel by 03:10 ET.

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