Big Tech Week

Pending home sales in the United States soared 8.3% month-over-month in December 2023, beating forecasts of a 1.5% increase, and rebounding from a revised 0.3% fall in November. It marks the first increase in three months and the strongest performance since June 2020 as consumers benefit from falling mortgage rates and stable home prices.

WTI crude futures jumped toward $79 per barrel on Monday, reaching the highest levels in two months as a Houthi attack on a Transfigura-operated fuel tanker in the Red Sea stoked fears of further supply disruptions. The oil tanker was hit by a missile off the coast of Yemen on Friday, prompting commodities trader Transfigura to reassess the security risk if further Red Sea voyages. Russian refined products exports are also expected to decline as several refineries are under repair after drone attacks. On the demand side, stronger-than-expected US economic data and fresh stimulus in China bolstered the outlook in two of the world’s largest oil consumers. Meanwhile, OPEC and its allies are set to meet online on Feb. 1, although the group is not expected to decide on output policy this early.

US stock futures fell on Monday as investors turned cautious ahead of earnings reports from mega-cap technology names and the Federal Reserve’s policy decision this week. Companies slated to report earnings this week include Apple, Microsoft, Meta, Amazon and Alphabet, as well as Dow components Boeing and Merck. Meanwhile, the Fed is widely expected to hold interest rates steady on Wednesday, while investors will zero in on Fed Chair Jerome Powell’s remarks after the meeting for clues on the potential start of the easing cycle. Stronger-than-expected US economic data and hawkish signals from central bank officials dampened expectations for a March rate cut, although traders are still betting on rate reductions later this year. Last week, the Dow rose 0.65%, the S&P 500 gained 1.06% and the Nasdaq Composite added 0.94%.

Asian equity markets mostly rose to kick things off this week as investors look forward to key economic data across the region this week. Markets are also preparing for the Fed’s policy decision on Wednesday, where it is expected to hold rates steady. Shares in Australia, Japan, South Korea and Hong Kong advanced, while mainland China stocks were sluggish as Evergrande shares were once again halted from trading.

All eyes will be on the Federal Reserve's interest rate decision, Non-Farm Payrolls, wage metrics, and the unemployment rate. Also, JOLTS job openings, ISM Manufacturing and Services PMI, Michigan consumer sentiment, and factory orders will catch attention. The earnings season will enter its third week, featuring reports from giants such as Microsoft, Alphabet, AMD, Mastercard, Apple, Amazon, Merck, and ExxonMobil. Globally, market focus will shift to Bank of England's monetary policy decision and Q4 GDP growth rates for the Euro Area.

That is it for this today folks, I'll be right back next week for another edition of 'Your Morning Reed' to get you up to speed on macro movers. For more in-depth discussions & further reports, join our Telegram group - @t.me/spectrumtradinggroup