Global Stocks on Hold as Inflation Data Looms
London: 26 February 2024 (TraderMade): Global stock markets are taking a breather after a strong rally last week as investors await critical inflation data that could influence central bank policies.
Key Takeaways
- US stock futures & global stocks: Flat after record highs, investors cautious.
- Data watch: US PCE price index (Thursday), Dallas Fed survey & new home sales, Eurozone inflation (Friday).
- Japan: Nikkei hits record high, Europe dips slightly.
Market Snapshot
Global stock markets are experiencing a pause after a strong rally last week. Investors are cautious, awaiting critical economic data that could impact central bank policies.
Factors Affecting Market Sentiment
- US Stock Futures: Flat after hitting record highs last week, driven by AI enthusiasm and Nvidia's performance.
- Global Stocks: Mostly flat, with the MSCI world equity index near its record high.
Upcoming Data Releases
- US: Personal consumption expenditures (PCE) price index, Dallas Fed manufacturing survey, new home sales data.
- Eurozone: Inflation data (Friday).
The Personal Consumption Expenditures (PCE) price index will be released Friday. It has been the Federal Reserve's preferred inflation gauge, causing some caution in the market. A higher-than-expected reading could prompt the Fed to delay any potential interest rate cuts, which could impact the recent stock rally.
Investors are closely watching this data point to understand the Fed's future monetary policy decisions and their potential implications for the stock market.
Regional Market Performance
- Japan: The Nikkei index reached a new record high of 39435.5 today.
- Europe: Stocks slightly lower.
Summary
While global stock markets have enjoyed a strong run recently, investors are now adopting a wait-and-see approach as they await critical economic data. The upcoming inflation data in the US will be particularly crucial in determining the future trajectory of interest rates and stock prices.
