1. Slight Rise in Futures Trading
U.S. stock futures showed marginal gains on Thursday, indicating a relatively calm opening for the stock market following a slight decline in the previous session.
At 05:00 ET (10:00 GMT), the Dow futures were steady, while S&P 500 futures increased by 5 points or 0.1%, and Nasdaq 100 futures rose by 59 points or 0.4%.
On Wednesday, Wall Street’s primary indices experienced a downturn, influenced by economic data that tempered expectations of an imminent reduction in interest rates by the Federal Reserve. Despite elevated inflation and borrowing costs, robust December retail sales figures suggested that U.S. consumer resilience remains intact, potentially delaying immediate Fed rate cuts.
Tech stocks, particularly those sensitive to interest rates, retreated, weighing down the Nasdaq Composite by 0.6%. The S&P 500 and Dow Jones Industrial Average also saw declines of 0.6% and 0.3%, respectively.
2. Upcoming Data on Housing Starts and Philly Fed Index
On Thursday, Federal Reserve officials and traders will analyze additional economic data to glean insights into price trends and overall economic activity.
Housing starts, a key metric for new residential construction, are projected to have reached 1.426 million in December, slightly lower than the previous month’s 1.560 million. This data point serves as an indicator of demand in the vital U.S. real estate sector and offers a glimpse into consumer willingness to make significant purchases.
Market observers will also focus on the release of the Philadelphia Federal Reserve index, a reliable gauge of the American manufacturing landscape.
Furthermore, Atlanta Fed President Raphael Bostic is scheduled to provide remarks that may touch on the outlook for interest rates. Earlier, Bostic mentioned that inflation appears to be moving towards the Fed’s 2% target, expressing comfort with the current “restrictive” monetary policy stance.
3. Google’s Pichai Announces Potential Job Cuts
Sundar Pichai, the CEO of Google, informed employees about impending workforce reductions in an internal memo, as reported by The Verge.
Pichai justified the cuts as necessary for streamlining operations and enhancing efficiency in certain areas, although he assured that the scale of layoffs would be smaller compared to the previous year and not affect every team. Google’s parent company, Alphabet, recently announced layoffs across various divisions, including the Voice Assistant unit and hardware segments overseeing products like Nest and Fitbit.
Job cuts have become prevalent across industries in recent times, reflecting a trend among companies to control expenses and prioritize investments in artificial intelligence technology.
4. TSMC Reports Fourth-Quarter Profit Decline
Taiwan Semiconductor Corp (TW:2330) recorded a smaller-than-expected decline in fourth-quarter profit, supported by increased sales of advanced chips.
The world’s leading contract semiconductor manufacturer anticipates a slightly weaker performance in the first quarter of 2024 but remains optimistic about chip demand in the upcoming year, driven by growing interest in artificial intelligence.
During an earnings call, CEO C.C. Wei highlighted the expected growth in 2024, underpinned by robust demand for AI-related technologies that require advanced semiconductor hardware.
Profit for the quarter ending Dec. 31 decreased to T\(238.7 billion (\)7.6 billion) from T\(295.9 billion a year earlier. Earnings per share amounted to T\)9.21, surpassing estimates of T$8.67 from Investing.com.
5. Oil Prices Climb on OPEC Forecast and U.S. Production Disruption
Oil prices saw an uptick on Thursday, driven by a positive demand outlook from OPEC and disruptions in U.S. crude production due to severe weather conditions in certain regions.
At 05:00 ET, U.S. crude futures rose by 0.8% to \(73.02 per barrel, while the Brent contract climbed 0.5% to \)78.28 per barrel.
In its monthly report, OPEC projected a sustained robust demand for crude oil over the next couple of years. Concurrently, adverse winter weather in North Dakota led to a significant drop in oil output, further supporting price increases.
Moreover, escalating tensions between Pakistan and Iran, marked by missile strikes, raised concerns about a potential escalation in the Middle East conflict, which could impact crude oil supplies. However, gains were tempered by unexpected growth in U.S. crude inventories and challenging recovery conditions in China.
