© Reuters
Investing.com – U.S. stock futures fell on Monday as key inflation data from the world's largest economy is due out later this week. Elsewhere, Boeing (NYSE:) shares are falling premarket as the planemaker and U.S. regulators reportedly discuss criteria for safety inspections following a dangerous mid-air fuselage rupture. He is now a senior executive in China's electric vehicle division Evergrande is detained on suspicion of “illegal crimes.”
1. Futures inches lower
U.S. stock futures moved below zero on Monday as investors prepared for the release of key inflation data later in the week that could influence how the Federal Reserve approaches possible interest rate cuts in 2024.
As of 5:13 a.m. ET (10:13 GMT), the contract had lost 9 points or 0.2%, had lost 36 points or 0.2% and was down 178 points or 0.5%.
Drawing attention is the release of the Bureau of Labor Statistics' U.S. consumer price index on Thursday, which is expected to show a slight increase to 3.2% in December. The measure registered a 3.1% pace in November. An acceleration of up to 0.2% can be observed.
But the core number, which excludes volatile items such as food and energy, is expected to slow to 3.8% and 0.2%, respectively.
How the numbers develop could impact market estimates for US interest rates in the coming months. Hopes that the Fed will cut borrowing costs early this year have faded recently, particularly after minutes from the central bank's last meeting revealed that officials expected interest rates could remain elevated “for some time.” to bring inflation back down to its 2% target.
Evidence that the Fed's fight to moderate price increases is progressing more slowly than expected could further weaken the high optimism among traders in the final weeks of last year.
2. Boeing shares plunge premarket as new 737 Max incident is investigated
Shares of Boeing fell sharply in premarket trading in New York on Monday amid reports that the planemaker and U.S. regulators are running into trouble conducting safety inspections following an accident involving a 737 Max jet last week.
On Friday, a plug in an emergency door tore off the left side of a Boeing 737 Max 9 jet shortly after an Alaska Airlines flight took off from Portland, Oregon, to Ontario, California. The pilots turned around and landed the plane. Several passengers were treated for minor injuries, but no deaths were reported.
The Federal Aviation Administration then ordered the temporary grounding of around 171 Boeing jets on Saturday. The agency later said the planes would not return to the air until it was satisfied they were safe.
But citing people familiar with the matter, Reuters reported that the FAA and Boeing had not yet agreed on the criteria for the safety checks – a crucial step before the checks could take place and flights could resume.
Meanwhile, according to media reports, Boeing plans to hold a company-wide meeting to discuss the incident. The company has already come under intense scrutiny for two fatal crashes of its 737 Max 8 aircraft in 2018 and 2019.
3. Congressional leaders reach bipartisan agreement on federal spending levels
Democratic and Republican leaders in Congress announced they have agreed to set the federal spending cap for fiscal year 2024 at about $1.66 trillion.
The framework agreement comes as lawmakers on Capitol Hill struggle to negotiate a deal to fund the government before several federal agencies run out of money later this month.
Republican House Speaker Mike Johnson said the agreement contained “hard-fought concessions,” while Democratic leaders said it “paves the way for Congress to act.”
A final spending deal would need to be passed by both the House and Senate before it can be signed into law by President Joe Biden.
4. Evergrande's EV unit says director arrested and shares slipped
Chinese conglomerate Evergrande's electric vehicle division said its deputy chief executive Liu Yongzhuo was arrested and faces criminal investigation, causing the company's Hong Kong-listed shares to fall.
In a filing with the Hong Kong Stock Exchange, China Evergrande New Energy Vehicle Group said Liu was arrested under the law on suspicion of “illegal crimes.” No further details were disclosed.
The announcement comes as Evergrande (HK:), the division's parent company and the focus of a real estate crisis that has threatened to disrupt China's economy, faces a hearing later this month on demands from offshore bondholders to wind up the company. Evergrande chairman Hui Ka Yan is also being investigated for alleged crimes, according to a separate file in September.
Evergrande NEV, which once had ambitions of producing a million cars a year by 2025, sold just 760 of its only electric vehicle model in the first half of last year. The company also recorded a net loss of 6.9 billion yuan during the period.
5. Oil falls after Saudi Arabia cuts prices
Oil prices fell on Monday after Saudi Arabia cut prices for its Asian crude exports to their lowest level in more than two years, reinforcing the current narrative that global demand remains weak.
At 5:14 a.m. ET, futures were trading 2.0% lower at $72.32 a barrel, while the contract fell 1.9% to $77.30 a barrel.
Major crude exporter Saudi Arabia on Sunday cut the official February selling price for its flagship Arab Light crude to Asia to its lowest level in 27 months.
But despite these worries about global economic activity, both benchmarks rose more than 2% last week as geopolitical tensions rose in the Middle East following attacks by Yemen-based Houthis on ships in the Red Sea, disrupting shipping activity in the region.
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