Bonds & Stocks
US equity futures rose as a fresh bout of optimism over artificial intelligence spurred tech stocks and investors awaited key policy decisions from the Federal Reserve and Japan. Contracts on the S&P 500 advanced and the Nasdaq 100 jumped more than 1% after Bloomberg reported that Apple Inc. is in talks to build Google’s Gemini AI engine into the iPhone. Google parent company Alphabet Inc. rallied more than 5% in premarket trading, While Apple was up 1.4%. Chipmaker Nvidia Corp. and Tesla Inc. added around 3%. European stocks were little changed.
Economy
Most indicators of broad US housing activity have improved modestly to start the year. Mortgage rates stabilized after falling from the long-time highs reached in October. Still, with Fed messaging skewing hawkish and mortgage rates climbing back higher in February, we expect data releases ahead to show a temporary slowdown in activity. As the Fed more firmly positions itself to cut rates mid-year, we expect housing activity to resume improving.
World
The Bank of England this week is likely to resist signaling imminent interest rate cuts despite the arrival of new data that is expected to show inflation sinking to a 2 1/2 year low. Governor Andrew Bailey and his colleagues are expected to leave the key rate at a 16-year high of 5.25% at their meeting on March 21. He’s been more cautious than the US Federal Reserve and European Central Bank in talking about a pivot to lower borrowing costs.