The US dollar opened higher against the Japanese yen, gaining 0.46%, while remaining largely unchanged versus the euro and the British pound as the US session began. Market attention is firmly on the upcoming Consumer Price Index (CPI) data due at 8:30 AM ET. Analysts expect the headline CPI to rise by 0.3%, matching last month’s increase, while the core CPI is forecasted to increase by 0.3%, up from 0.2% previously. Year-on-year inflation rates for both headline and core CPI are expected to tick up slightly to 2.7% from 2.6%, indicating inflation remains persistent.
Later in the morning at 10 AM ET, US new-home sales figures will be released, with an anticipated decline to 0.720 million from 0.800 million last month. Additionally, the US Treasury will hold an auction for 30-year bonds at 1 PM.
US markets opened Tuesday under the shadow of geopolitical tension and corporate earnings risk. Energy markets have come into sharp focus following drone attacks on four oil tankers near the Caspian Pipeline Consortium (CPC) terminal by the Black Sea. The CPC terminal is an important route for Kazakhstan’s crude exports, and these attacks have pushed Brent and WTI crude prices over $1 higher, as concerns rise over potential supply disruptions and escalating geopolitical risks.
These incidents occur as the US government continues to contemplate military and covert responses related to Iran, maintaining pressure on energy markets. The ongoing risks in the Black Sea region and the Middle East have established an upward bias in crude prices, reinforcing inflation-sensitive positions ahead of US inflation data later this week.
Tuesday also marks the official start of the US fourth-quarter earnings season, with financial institutions in the spotlight. Investors are focused on key indicators including consumer health, loan growth, credit quality, and net interest margins as the Federal Reserve signals a potential easing of monetary policy.
JPMorgan Chase reported earnings per share (EPS) of $4.63, falling short of analyst expectations of $4.97, with revenue at $45.8 billion versus the anticipated $46.11 billion. Despite the miss, JPMorgan’s shares edged higher in premarket trading after a 1.43% decline the previous day.
Bank of New York Mellon surpassed expectations with EPS of $2.02 against $1.91 projected, and revenue of $16.0 billion beating the estimated $14.72 billion. However, its shares fell 1.3% in premarket trading.
Delta Air Lines also beat estimates with EPS of $1.64 and revenue of $5.19 billion, exceeding forecasts of $1.53 and $5.14 billion respectively. Despite positive results, Delta’s shares declined by 5.11%.
Later in the week, major banks including Wells Fargo, Citi, Bank of America, and Morgan Stanley will report, providing a broader perspective on how large financial firms are managing slowing economic growth, changing rate expectations, and geopolitical uncertainties.
Outside of financial stocks, Taiwan Semiconductor Manufacturing Company (TSMC) will report earnings on Thursday before the US market opens. TSMC’s guidance will be closely watched for insights into AI-driven chip demand, global technology supply chains, and semiconductor capital expenditure trends. As a key supplier for companies like Nvidia and Apple, and a central player in the global AI ecosystem, TSMC’s outlook could significantly influence both technology stocks and overall market sentiment.
Looking ahead, several key economic data releases are scheduled for the rest of the week.
On Wednesday, January 14, the following data are due:
– Core Producer Price Index (PPI) monthly change: expected at 0.2%
– PPI monthly change: expected at 0.2%
– Core Retail Sales monthly change: expected at 0.4%
– Retail Sales monthly change: forecasted at 0.5%, up from 0.0% previously
These figures will help to determine whether consumer demand remains robust and whether inflationary pressures in supply chains are easing or intensifying following the CPI release.
Thursday, January 15 brings further key growth indicators:
– US Weekly Jobless Claims: forecasted at 215,000, slightly up from 208,000
– Empire State Manufacturing Index: expected to improve to 0.8 from -3.9
– Philly Fed Manufacturing Index: expected to improve to -1.6 from -10.2
– UK GDP monthly change: anticipated at 0.1% versus -0.1% previously
This day offers an important check on manufacturing activity in the US and the health of the UK economy.
On Friday, January 16, the Bank of England Governor Andrew Bailey will speak, with markets focused on any guidance regarding interest rate cuts and commentary on UK inflation.
US stock futures were trading lower at the start of the day with the Dow Jones Industrial Average down 92 points, the S&P 500 index slightly lower, and the NASDAQ index down by 43 points, reflecting ongoing cautious sentiment.
Original Source: Greg Michalowski of investinglive.com
