The New York Stock Exchange is set for a relatively quiet session on Tuesday, marked by moderate scores at the start of a shortened week after yesterday's Memorial Day holiday.

Half an hour before the opening, futures contracts on the main New York indices are fluctuating between slight losses and limited gains, heralding an uncertain opening.

Back in front of their screens after their long weekend, Wall Street investors are likely to remain relatively inactive as they await the next PCE inflation figures, due out on Friday.

Jim Reid, market analyst at Deutsche Bank, points out: "I don't need to remind you how closely this data will be scrutinized and how important it is for the Fed.

The news that disinflation is continuing, in line with market expectations, is unlikely to be enough to precipitate expectations of rate cuts, given the resilience of the economy.

Based on April producer and consumer prices, we anticipate an increase of 0.25% over one month", says Christopher Dembik, Investment Strategy Advisor at Pictet AM.

"This is still too high to consider an imminent rate cut, in June or July for example", he warns.

On the indicator front, the news looks much quieter today, with only house prices and the Conference Board's consumer confidence index on today's agenda.

While Wall Street appears to be looking for the next catalyst to go in search of new record highs, questions about valuations are also becoming more real with the prospect of high interest rates for longer.

The valuations of tech giants such as Nvidia, which act as market engines, are coming under increasing scrutiny.

"Today, the 12-month price-earnings ratio (PE) of the Magnificent Seven is 31x, compared with 18x for the rest of the S&P index", points out Xavier Baraton, Investment Director at HSBC Asset Management.

At these valuation levels, investors remain vulnerable to a scenario in which earnings in these sectors disappoint", he warns.

In his view, the main risk to equity markets is that the Fed will keep rates unchanged, even as far ahead as 2025.

On the bond front, US Treasury yields are easing a little ahead of the inflation figures, with 10-year paper falling back to 4.46%.

Oil prices are rising, reversing a trend that has been in place since the beginning of April, thanks to the weakening dollar. The price of a barrel of US light crude (WTI) thus recovered 1.8% to 79.1 euros.

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