Wall Street inched toward modest gains before the open Friday as markets continue to erase last week’s sweeping losses. Futures for the S&P 500 climbed 0.2% before the bell Friday while futures for the Dow Jones Industrial Average were 0.1% higher. All the major U.S. indices are up this week and within reach of negating last week’s technology-led wipeout, markets’ worst week in a year-and-a-half. Optimism is high that the Federal reserve is poised to cut its main lending rate next week for the first time in four years, though most experts are expecting a traditional quarter-point cut, not the half-point that some were previously calling for.
The Federal Reserve, in its efforts to curb inflation, has been raising interest rates. This has led to a decrease in consumer spending and business investment, which has helped to slow down the economy. The Fed’s actions have been effective in bringing down inflation, but they have also come with some costs. The Fed’s rate hikes have led to a rise in mortgage rates, making homeownership more expensive.
The strike, which began on Friday, is the first of its kind in the company’s history. It’s a significant development in the labor relations landscape of the aerospace industry, potentially impacting the production of Boeing’s iconic 737 and 787 Dreamliner models. The strike is a direct result of the company’s failure to meet the demands of the union, particularly regarding wages and benefits.
Hong Kong’s Hang Seng rose 0.8% to 17,369.09, while the Shanghai Composite was down 0.5% at 2,704.09 after China’s legislature announced Friday that it would raise the retirement age from 60 to 63 years for men and from 50 to 55 or 58 years for women, according to state media. The Chinese Academy of Sciences said the pension system may run out of money by 2035 because of the current economic slump and an aging population. China is also set to release its monthly economic data on Saturday, with market predictions that the three key indicators — industrial production, fixed asset investment and retail sales — will show a slowdown.
Japan’s benchmark Nikkei 225 slipped 0.7% to close at 36,581.76 after data released Friday showed the nation’s industrial production increased 2.9% year-on-year in July, signaling improved demand in the manufacturing sector. The dollar fell to 140.83 yen from 141.79 yen, adding pressure on Japan’s exports. “The Bank of Japan is not expected to make any rate move at its meeting next week, but there may be some hawkish pricing brewing for policymakers to lay the groundwork for further rate hikes in December and beyond,” said IG market analyst Yeap Jun Rong. Elsewhere, Australia’s S&P/ASX 200 rose 0.3% to 8,099.90. South Korea’s Kospi picked up 0.1% to 2,575.41.
* Energy prices surged in the wake of the OPEC+ decision to cut production. * Benchmark U.S. crude gained 72 cents to $69.69 a barrel.
