© Reuters
Investing.com – U.S. stock futures rose, pointing to an extension of gains recorded in the previous session. Elsewhere, the US Congress is passing a bill to provide short-term funding for the federal government, while department store chain Macy's (NYSE:) is reportedly planning to cut thousands of jobs and close some locations.
1. US futures rise
US stock futures trended slightly in the green on Friday.
As of 5:16 a.m. ET (10:16 GMT), the contract was up 73 points, or 0.2%, while it had gained 18 points, or 0.4%, and was up 114 points, or 0.7%.
Wall Street's major averages rose sharply on Thursday, driven in part by the biggest one-day rise in shares of iPhone maker Apple (NASDAQ:) in eight months. U.S.-listed shares of TSMC also rose sharply after the chipmaker said rising demand for artificial intelligence will lead to a revenue increase of more than 20% in 2024.
Strong U.S. jobs data also boosted confidence that the world's largest economy is on track for a so-called “soft landing” – a scenario in which inflation cools without a slowdown in activity. Those hopes helped lift sentiment, which has been dampened recently by fading expectations that the Federal Reserve will soon cut interest rates from their more than two-decade peak.
2. Sales of existing homes are imminent
Markets will have a chance to review new housing market data on Friday that could provide insight into the health of U.S. consumers.
A Wall Street Journal survey of economists said existing home sales were expected to have risen a seasonally adjusted 0.3% in December compared to the previous month. Throughout the year, it can be observed that the key figure is falling to its lowest level since 2008.
Mortgage rates in the U.S. were elevated for much of 2023, causing many buyers to shy away from home purchases. Meanwhile, higher mortgage rates also convinced many current homeowners to stay put, reducing housing supply and limiting the decline in home prices.
But mortgage rates, which hit a 23-year high in October, have shown signs of cooling. On Thursday, Freddie Mac reported that the average 30-year fixed-rate mortgage fell this week to its lowest level since May of last year.
“This is an encouraging development for the housing market and particularly for first-time homebuyers who are sensitive to changes in housing affordability,” Freddie Mac chief economist Sam Khater said in a statement. “However, as purchasing demand continues to decline, this will increase pressure on already depleted inventories to sell.”
3. The US Congress passes a short-term financing law
Congressional lawmakers have given the green light to a bill that will keep the federal government in office until March, even as political disputes continue over issues such as the war in Ukraine and U.S. border security.
The U.S. Senate approved the measure by a vote of 77-18, while the House of Representatives approved it by a vote of 314-108. The bill now heads to President Joe Biden's desk for his signature.
Thursday's decision is a repeat of recent short-term funding extensions and will provide the funds needed to operate several key departments through March 1 and the rest of the government through March 8. They were supposed to run out of money on January 19th and February 19th. 2 or
But leaders on Capitol Hill still face the task of securing funding for a nearly $1.7 trillion U.S. spending deal negotiated earlier this month. The details still need to be worked out, as the Biden administration and Democrats may need to agree to increased funding to curb immigration at the southern U.S. border to secure Republican support for military aid to Ukraine.
4. Macy's cuts jobs and closes stores – reports
According to media reports, Macy's will reduce the number of employees and closing locations to cut costs and streamline its business.
The US department store chain will cut 2,350 jobs – equivalent to 3.5% of its workforce – and close five stores. Macy's employed 94,570 full- and part-time employees and operated 722 stores as of January 2023.
The Wall Street Journal, which first reported the plans, said Macy's is looking to further automate its supply chain and outsource some jobs. In a memo to employees cited by the WSJ, the company said the layoffs would occur Jan. 26.
Macy's is under intense pressure from activist investors who are reportedly eyeing a $5.8 billion takeover of the owner of Bloomingdale's and Bluemercury beauty stores. The company, which is also in the midst of a leadership transition, has not yet publicly responded to the activists.
5. Raw pace for weekly gains
Oil prices rose on Friday, setting the stage for a positive week fueled by geopolitical tensions as well as disruptions to U.S. oil production due to a winter storm.
At 5:17 a.m. ET, futures were trading 0.8% higher at $74.51 a barrel, while the contract rose 0.7% to $79.64 a barrel. Both benchmarks are on track for weekly gains of between 1% and 2%.
The cold weather knocked out about 40% of oil production in North Dakota, a top U.S. oil-producing state, supporting the overall market while tankers continued to be pulled away from the Red Sea due to violence in the region.
Also helping the market were data from the U.S. Energy Information Administration that showed a bigger-than-expected decline in crude oil inventories of 2.5 million barrels, even as gasoline and distillate inventories rose to multi-year highs.
Comments are closed.