Fed speak ahead, Apollo’s reported Intel investment plan – what’s moving markets
Investing.com — US stock futures are choppy, with traders gearing up for new economic data and awaiting statements from Federal Reserve officials following last week’s super-sized interest rate cut by the central bank. Elsewhere, asset manager Apollo Global Management reportedly proposes placing an investment in chipmaker Intel worth $5 billion, while US House Republicans unveil a fresh stopgap funding plan as lawmakers face a looming government shutdown just weeks before the November presidential election.
1. Futures choppy
US stock futures oscillated around both sides of the flatline on Monday, as investors looked ahead to an upcoming raft of fresh economic data this week that could factor into how the Federal Reserve approaches moentary policy over the rest of the year.
By 03:30 ET (07:30 GMT), the Dow futures contract had shed 116 points or 0.3%, S&P 500 futures had edged down by 15 points or 0.3%, and Nasdaq 100 futures had dipped by 63 points or 0.3%.
The main averages on Wall Street were broadly muted on Friday, with a frenzy of buying easing somewhat after a rally sparked by an aggressive interest rate cut by the Fed earlier in the week.
However, the 30-stock Dow Jones Industrial Average touched a fresh record high, fueled by a spike in shares in athletic apparel company Nike (NYSE:NKE), which announced the departure of Chief Executive John Donahoe.
2. Fed speakers ahead
Remarks by Fed officials in the coming days will likely shed light on last week’s landmark 50-basis point rate cut.
Investors will hear from Atlanta Fed President Raphael Bostic on Monday, followed by Chicago Fed President Austan Goolsbee.
Fed Governor Michelle Bowman — the first Fed official to dissent a decision by the central bank since 2005 — is to speak on Tuesday and again on Thursday. Last week, Bowman voiced concern that the jumbo drawdown would send the wrong signal with the pace of price increases in the US currently above the Fed’s 2% goal. Her comments clashed with those of fellow Fed Governor Christopher Waller, who argued that a big cut was needed to keep inflation from undershooting the Fed’s 2% target.
Elsewhere, Fed Chair Jerome Powell is to speak on Thursday at the 10th annual US Treasury Market Conference. New York Fed President John Williams and Vice Chair of Supervision Michael Barr will also both speak at the same event.
3. Apollo proposes $5 billion investment in Intel – Bloomberg News
Apollo Global Management (NYSE:APO) has offered to make an investment of up to $5 billion in beleaguered chipmaker Intel Corporation (NASDAQ:INTC), Bloomberg News reported on Sunday.
The asset manager indicated that it would be willing to make an equity-like investment in Intel, the Bloomberg report said, with top management of the chipmaker considering the offer.
The equity investment would grant Intel some much needed breathing room, as the company grapples with a sharp decline in sales and a potential cash crunch. Intel has previously outlined cost-cutting measures, including reducing headcount by as many as 15,000 employees.
Apollo had earlier this year said it would acquire a 49% interest in a joint venture for Intel’s new production facility in Ireland for $11 billion.
4. House GOP lawmakers unveil stopgap government funding bill
US House Republicans have unveiled a new plan that would keep the government funded for three months and avoid a partial shutdown.
The proposal, which excludes a key immigration-related measure supported by Republican presidential candidate Donald Trump, is expected to be voted on by the lower chamber of the US Congress on Wednesday, Reuters reported. The government’s current $1.2 trillion in discretionary funding is due to run out on Sept. 30.
If lawmakers fail to pass a bill to secure the funding, large portions of government operations could be forced to shut down mere weeks before November’s crucial presidential election. Thousands of federal workers would also be at risk of being furloughed as well.
Republican US House Speaker Mike Johnson said that allowing the government to shut down so close to such a “fateful” vote would be “an act of political malpractice.”
5. Oil inches up amid Middle East tensions
Crude prices hovered above the flatline Monday, buoyed by concerns that heightened conflict in the Middle East may curtail regional supply.
By 03:32 ET, the Brent contract had gained 0.2% at $73.81 a barrel, while U.S. crude futures (WTI) traded 0.2% higher at $71.10 per barrel.
Traders were seen attaching a risk premium to oil prices as Israel continued to carry out strikes in Gaza and Lebanon, keeping concerns of an all-out war in the oil-rich region in play.
Hezbollah had recently vowed retaliation against Israel after the country allegedly detonated several electronic devices used by the Lebanese group.
The constant fighting and threats of war pushed up concerns that a bigger conflict in the Middle East will disrupt supplies, tightening global markets. Crude prices have seen a two-week rebound from near three-year lows, boosted by supply fears in the wake of Hurricane Francine.