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Futures muted, NFPs ahead this week, Macy's takeover bid - what's moving markets

Published 03/04/2024, 03:27 AM
Updated 03/04/2024, 04:38 AM
© Reuters

Investing.com -- Stock futures on Wall Street are mixed heading into a new trading week. Federal Reserve monetary policy will likely be a major focus for markets, particularly when the closely-watched February labor market report is released on Friday. Elsewhere, an investor group hikes its takeover offer for department store chain Macy’s (NYSE:M), while Super Micro Computer (NASDAQ:SMCI) is due to join the benchmark S&P 500 later this month.

1. Futures mixed

U.S. stock futures hovered around both sides of the flatline on Monday, with a white-hot rally in equities showing some signs of cooling prior to more cues on Federal Reserve monetary policy and fresh developments in the American presidential election.

By 03:24 ET (08:24 GMT), the Dow futures contract had shed 60 points or 0.2%, S&P 500 futures had dipped by 3 points or 0.1%, and Nasdaq 100 futures had added 22 points or 0.1%.

The main averages ended the previous trading week higher after weak economic data and comments from Federal Reserve officials supported hopes for an interest rate cut by the U.S. central bank later this year. A gauge of manufacturing activity in the world's largest economy remained in contraction territory for the 16th consecutive month, while consumer surveys from the University of Michigan slipped by more than anticipated.

Elsewhere, Fed Governor Christopher Waller said that the size of bank's balance sheet did not influence its ongoing battle to corral inflation, feeding expectations for a potential future rate reduction.

2. Jobs report, retail earnings ahead this week

Friday’s monthly jobs report is set to headline this week's economic calendar, as investors try to assess the timing of the first Fed interest rate cut.

Markets are currently betting that the central bank could start to ratchet borrowing costs down from more than two decade highs in June. But signs of continued strength in the labor market could make it harder for traders to shrug off concerns that inflation may be reignited if the Fed begins easing too soon.

Economists are expecting the economy to have added 190,000 jobs in February after January’s blowout 353,000 gain, which was the largest in a year. The unemployment rate is projected to hold steady at 3.7%, while wage growth is seen moderating.

On the earnings front, an ebbing flow of corporate results will include big-box retailers like Target (NYSE:TGT), Costco (NASDAQ:COST) and Kroger (NYSE:KR). The returns could help to flesh out the picture of U.S. consumer demand, which has been dented recently by high inflation and elevated interest rates.

3. Investor group increases Macy's takeover offer

An investor group consisting of Arkhouse Management and Brigade Capital hiked its offer to take department store chain Macy’s private, just months after the firm rejected an earlier offer.

The group is now offering $24 in cash per Macy’s share, up from its earlier offer of $21 per share, it said in a press release late on Sunday. The offer is a 33% premium to Macy’s close on Friday, and values the chain at about $6.6 billion.

Arkhouse said that the group was open to further increasing the takeover price. Macy's said in a statement on Sunday that its board will review the new proposal.

The increased offer is the second after a previous bid was rejected in November. It also comes after Macy's announced a major restructuring drive that will see the firm slash costs, reduce inventory, and shutter 150 stores over the next three years.

4. Super Micro Computer to join S&P 500

Shares in Super Micro Computer spiked in premarket U.S. trading on Monday after S&P Dow Jones Indices announced that the seller of artificial intelligence-optimized servers is slated to join the benchmark S&P 500 later this month. 

Following the statement on Friday, Super Micro's stock price jumped in after hours trading. Around $10 billion worth of shares in the firm exchanged hands, greater than tech giants Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).

A provider of cutting-edge servers powered by AI chips designed by Nvidia (NASDAQ:NVDA), Super Micro has been a major beneficiary of surging enthusiasm around the possible applications of the nascent technology. Its stock price has soared by more than 217% so far this year, pushing its market capitalization above $50 billion.

Along with Super Micro, athletic apparel firm Deckers Outdoor (NYSE:DECK) will also be added to the S&P 500. The two companies will replace home appliance group Whirlpool (NYSE:WHR) and Utah-based lender Zions Bancorporation (NASDAQ:ZION), respectively, on the index.

5. Oil prices subdued

Crude prices were largely muted in European trade on Monday, as support from a move by oil group OPEC+ to maintain its current pace of production cuts until the second quarter was tempered by calls from top U.S. officials for an immediate Israel-Hamas ceasefire.

Oil markets were sitting on strong gains over the past two weeks, bolstered by expectations of tighter supplies this year, while optimism over an eventual decline in U.S. interest rates also aided sentiment.

Weighing on some of the momentum was a call from U.S. Vice President Kamala Harris on Sunday for Hamas to immediately accept a six-week ceasefire. She also urged Israel to offer more aid to Gaza. Her comments were some of the strongest yet made by a senior U.S. official on the ongoing war, and potentially signaled diplomatic intervention by the country in the conflict.

Brent oil futures expiring in May rose 0.1% to $83.67 a barrel, while West Texas Intermediate crude futures for May climbed by 0.1% to $79.17 per barrel by 03:16 ET.

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