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U.S. futures inch slightly lower amid debt ceiling talks, earnings, data this week

Published 2023-01-23, 07:25 a/m
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By Scott Kanowsky 

Investing.com -- U.S. stock futures pointed only marginally lower on Monday, with investors eyeing debt ceiling talks in Washington, earnings from major tech companies, and a fresh batch of key economic data this week.

At 06:50 ET (11:50 GMT), the Dow Futures contract was down 9 points or 0.03%, while S&P 500 Futures traded 4 points or 0.10% lower, and Nasdaq 100 Futures dipped by 9 points or 0.08%.

The main averages closed higher on Friday, but the S&P 500 ended a choppy week lower. The broad-based index gained 73 points, or 1.9%, in the prior session, but lost 0.7% over the holiday-shortened four-day trading week. However, the tech-heavy Nasdaq Composite increased by 288 points or 2.66%, to bring its weekly increase to 0.6%.

Stocks were given a lift mid-session from comments by Federal Reserve governor Christopher Waller supporting a slowdown in the central bank's recently aggressive monetary policy tightening campaign. That optimism was tempered by economic figures last week that showed a bigger-than-expected fall in retail and wholesale prices in December, leading to worries about the state of the U.S. consumer despite hopes that a recent spike in inflation may have peaked.

Meanwhile, a high-stakes deadlock is looming in Washington after the U.S. government hit its $31.4 trillion borrowing limit last week. A row is now brewing between hardline Republicans and President Joe Biden's Democrats over raising the country's debt ceiling.

House Republicans want cuts to government spending before they will approve a higher ceiling; a similar demand in 2011 prompted S&P to cut the U.S. credit rating for the first time and caused chaos in financial markets. The White House has called lifting the debt ceiling a non-negotiable issue.

Leaders said over the weekend that they are working to prepare a plan to avert the crisis by possibly changing the debt ceiling from a fixed dollar amount to a percentage of U.S. economic production.

Elsewhere, the U.S. is scheduled to publish a first estimate of fourth quarter gross domestic product on Thursday with analysts expecting the economy to have expanded by an annualized 2.6%, after 3.2% in the third quarter. The economic calendar also includes data on initial jobless claims, durable goods orders, and new home sales on Thursday and the personal consumption price index on Friday.

In corporate news, earnings results in the coming week will test the recent bounce in technology stocks amid questions over whether mega-cap companies can increase revenue and profits while cutting costs in a challenging macroeconomic backdrop.

Microsoft (NASDAQ:MSFT), the second biggest U.S. company by market value, reports on Tuesday followed by Elon Musk's Tesla (NASDAQ:TSLA) on Wednesday, and Intel (NASDAQ:INTC) on Thursday.

Monday's movers pre-market included Advanced Micro Devices (NASDAQ:AMD) and Qualcomm (NASDAQ:QCOM), which were both boosted by a ratings upgrade at Barclays. But the bank downgraded Applied Materials (NASDAQ:AMAT) over concerns about semiconductor capital equipment stocks, causing shares in the company to decline.

Salesforce (NYSE:CRM) jumped after hedge fund Elliott Investment Management announced that it would take a large stake in the big enterprise software player.

Streaming music service Spotify (NYSE:SPOT) rose on a Bloomberg report that it will slash jobs as soon as this week, following similar moves by tech peers like Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL).

Attention in oil markets is honing in on the outlook for a recovery in demand in China as the country reopens from strict COVID-19 measures, as well as risks to Russian production in 2023. By 06:50 ET, U.S. crude futures traded 0.51% higher at $82.06 a barrel, while the Brent contract increased by 0.62% to $88.17.

Additionally, gold futures moved down 0.11% to $1,926.05/oz, while EUR/USD rose 0.23% to 1.0880.

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