The US equity markets displayed a mixed performance on Monday as investors remain cautious while awaiting crucial inflation data and bank earnings slated for later this week. The official US producer price index (PPI) report for December is set to be released on Tuesday, closely followed by consumer inflation data on Wednesday.
These economic indicators are vital as they provide insights into inflationary trends which could influence Federal Reserve policy decisions moving forward. In the realm of banking, major financial institutions are preparing to disclose their quarterly earnings reports. Notable companies slated to report include JPMorgan Chase, Bank of America, Wells Fargo, Morgan Stanley, Goldman Sachs, and Citigroup, all of which play significant roles in the US financial landscape. According to a recent survey conducted by the Federal Reserve Bank of New York, US consumers' median inflation expectations remained steady at 3% over a one-year horizon in December.
However, when looking beyond the immediate future, inflation expectations shifted; they increased to 3% from 2.6% for the three-year outlook but decreased to 2.7% from 2.9% for the five-year forecast. Such fluctuations in consumer expectations are pivotal as they can impact spending and saving behaviors. In commodities, February West Texas Intermediate crude oil saw a notable increase, closing up $2.18 to settle at $78.75 per barrel.
Meanwhile, March Brent crude, the global benchmark, edged up $1.13 to $80.89. This rise comes as traders carefully evaluate the risks to supply stemming from tightened U.S. sanctions on Russia's oil exports, which adds a layer of complexity to the oil markets. On the pharmaceutical front, shares of Moderna experienced a significant drop, plummeting 17% after the company revised its full-year revenue outlook downwards.
The company announced plans to cut cash costs by $1 billion by 2025, underscoring a strategic move to streamline operations amidst challenging market conditions. In noteworthy corporate developments, Johnson & Johnson has agreed to acquire Intra-Cellular Therapies for a substantial sum of $14.6 billion in cash, a move intended to bolster its neuroscience portfolio.
The acquisition resulted in a positive reaction, with Johnson & Johnson's shares rising 1.7%, while Intra-Cellular's shares surged 34% as investors responded favorably to the news. As economic indicators and corporate earnings loom on the horizon, market participants will be closely monitoring these developments for potential cues on the direction of the market and investment strategies moving forward..