Jan 22, 2024: U.S. stock index futures are poised to surpass last week’s peaks on Monday, following the upward momentum in Japanese stock markets. The week ahead is filled with central bank meetings, major economic data releases, and corporate earnings.
Rising futures suggest continued strength in the S&P 500, driven by the record-breaking performance of chip and mega-cap stocks last week. Nasdaq futures are extending their rally with a 0.6% gain, while S&P 500 futures show a 0.3% increase.
Chipmakers like Nvidia (NASDAQ: NVDA) and Advanced MicroDevices have been beneficiaries of the recent AI-driven rally, contributing to the Nikkei stock index’s surge by 583.68 points, marking its highest close since February 1990. January gains for the Nikkei are approaching 9%.
However, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, experienced a 0.6% decline. The index faced pressure from weakness in China’s markets, which hit five-year lows last week, leading to speculation that state funds might need to support stocks.
Florian Ielpo, Head of Macro at Lombard Odier Investment Managers, commented on the current market scenario, stating, “The wide majority of macro-economic data shows we are in a recovery period but that markets have yet to price this in.” He highlighted that while rates have decreased by 1.5%, easing costs, growth rates remain lower compared to the past 20 years.
The European Central Bank (ECB) is set to meet on Thursday, and it is anticipated to keep monetary policy unchanged. Futures indicate a pricing of 40 basis points of easing by June, with a 76% chance of the first cut in May.