European stocks are projected to open higher on Monday, following a record-breaking week for the S&P 500. The easing of tensions in the Middle East have contributed to this outlook, with the Israeli military announcing that its recent series of strikes on southern Gaza have ended, although further details were not provided. Iran's foreign minister, Hossein Amirabdollahian, also indicated potential progress towards a diplomatic resolution for the Israel-Hamas conflict, although he did not provide specific details or timeline.
Asian stocks, on the other hand, were mostly lower due to many major markets, including China, Hong Kong, Japan, South Korea, Taiwan, Malaysia, and Singapore, being closed for public holidays. Investors remain cautious while awaiting key U.S. CPI data and feedback from Federal Reserve officials this week. These are expected to provide insights on the likelihood of the Federal Reserve starting to cut interest rates.
Projections indicate that U.S. consumer price inflation may have slightly lessened in January, but it is still expected to exceed the Federal Reserve's 2 percent annual target. This week will also see the release of critical U.S. data on producer price inflation, retail sales, and industrial production.
Several notable companies such as Coca-Cola, Kraft Heinz, Cisco, and Deere are scheduled to report their quarterly results this week as well. The U.S. dollar weakened after a four-week rise in Asian trade. Meanwhile, gold remained steady due to expectations of a hawkish Federal Reserve, and oil prices fell by approximately half a percent after the previous week's increase.
On Friday, U.S. stocks increased after revised data showed a lower-than-expected rise in monthly consumer prices for December. The Nasdaq Composite, largely technology-based, increased by 1.3 percent to reach its highest point in over two years. The S&P 500 grew by 0.6 percent, surpassing 5,000 for the first time and securing five consecutive weeks of gains. Conversely, the Dow dropped slightly by 0.1 percent.
European stocks didn't perform as well on Friday, with investors processing the latest earnings, German inflation data, and comments from Bank of England policymaker Jonathan Haskel regarding the need for more evidence of price stability. The European-wide STOXX 600 marginally dipped, along with Germany's DAX and France's CAC 40 by around 0.2 percent. The U.K.'s FTSE 100 also fell by 0.3 percent.
