5 Things You Need to Know to Start Your Day: Americas

Good morning. There’s no rush to cut interest rates, some see a hard landing for the US economy and hopes for a chip industry rebound have b [View in browser]( [Bloomberg]( Good morning. There’s no rush to cut interest rates, some see a hard landing for the US economy and hopes for a chip industry rebound have been bolstered. Here’s what’s moving markets. — [Sam Unsted]( No rush to cut [There is no rush to cut interest rates in the US]( with the country’s labor market and economy still strong, according to Federal Reserve Bank of Atlanta President Raphael Bostic. He also cautioned that it remains unclear that inflation is heading sustainably to the 2% target, saying the evidence so far indicates “victory is not clearly at hand.” Most Fed officials have spent this year pushing back on market expectations for when the central bank will cut rates, with some also awaiting a [broader pullback in price pressures](. Hard landing Treasuries fell after Bostic’s comments and have held the decline. A fund run by Jupiter Asset Management has boosted its Treasury holdings to a record level, however, and[ forecasts the US economy is headed for a hard landing](. In stocks, the latest data from Bank of America showed that global equity funds have seen the largest four-week inflows since February 2022, coming after a report showing Japanese and Chinese funds [dumped a record amount of US stocks last year](. S&P 500 futures are edging higher into Friday’s session, while Nasdaq 100 futures are bouncing by more. Chip rebound The sharper gain for the tech-heavy Nasdaq 100 is likely being driven by a surge for shares of Applied Materials, the semiconductor equipment manufacturer. It is notching up a double-digit rise in premarket trading after a [bullish sales forecast for the year points to a rebound]( and suggests some of the largest chipmakers are increasing investments in new production. Other chip industry names are rising after the report too, notably giant Nvidia. Nike cuts Sportswear giant Nike has added itself to the growing list of companies announcing job cuts in the early part of the year, saying it will [cut its global workforce by 2%]( as it grapples with more competition and a tougher sales outlook. Elsewhere, food delivery firm DoorDash’s results were better than anticipated but its [shares were under pressure following a strong run](. Streaming-video platform Roku sunk too amid continued weakness in the advertising market. Crypto exchange Coinbase, however, beat estimates and [unexpectedly returned to profitability](. China pickup A resurgence in travel over the Chinese Lunar New Year holiday has provided some signs of a [consumer spending recovery]( in an economy struggling with low confidence and deflation. There was a 61% rise in rail trips in the first six days of the national new year holiday, with the highest number overall in Bloomberg News-compiled data in the past five years. That helped to give a lift to luxury goods and mining stocks in Europe, having boosted equities in China and Hong Kong earlier. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Trump’s civil fraud trial and Nike on the [Daybreak Europe podcast]( - No stopgap to [avoid a shutdown](, a key Republican says. - [A new AI tool from Apple]( to rival Microsoft’s GitHub Copilot. - An office giant suggests [the worst is over](. - [The Trump election case]( takes a dramatic turn. - A good day for [a “psychological short.”]( - Tough work-from-home rules mean [no Friday-Monday remote](. And finally, here's what Katie’s interested in this morning Narratives change pretty quickly when traders have their eyes trained on every incremental data point. Case in point: rate hikes are back in the conversation. Citigroup said this week that markets would be wise to start hedging for the possibility that the Federal Reserve reverts back to raising rates after a brief easing cycle. “The market should price in some risk of future hikes – look to 1998,” Citi’s Jason Williams wrote in a note. This cycle “could be more akin to the 1998 easing cycle, which was short-lived and led to more rate hikes. If inflation does not return to a consistent 2% the upside tails around future Fed hikes should increase from this very depressed level.” Interestingly, Citi’s Williams published his thesis a day before the release of January’s inflation report, which showed that both the headline and core consumer price index rose by more than forecast last month. While a weaker-than-expected January retail sales print gave some comfort to bond bulls on Thursday, traders have pushed out their bets on the Fed’s first cut. In the aftermath of the print, Kit Juckes of Societe Generale took it a step further than Citi. The chief FX strategist said that the Fed’s next move could actually be a hike rather than a cut, given that more than 500 basis points of tightening since 2022 has done little to cool the US economy. “If the US economy reaccelerates, the Fed will eventually have to tighten again and the dollar will rally,” Juckes wrote in a note to clients. Follow Bloomberg's Katie Greifeld on X [@kgreifeld]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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