Stock futures slip as Powell says Fed needs more evidence before cutting rates: Live updates

Catalent shares were up more than 12% after the company reached a deal with Novo Holdings to be acquired $63.50 per share in cash. The deal values Catalent at $16.5 billion on an enterprise value basis.

“Over the past several years, Catalent has built a comprehensive end-to-end offering of services and capabilities to drive innovation in the healthcare system and improve patient outcomes. This transaction is a testament to our team’s hard work and dedication to this mission,” Catalent CEO Alessandro Maselli said in a statement.

The deal is expected to close in late 2024.

Onshore China shares are set for a sixth-straight daily loss, hurt by a sell-off in small-cap stocks despite more official pledges over the weekend to stabilize the country’s financial markets.

The benchmark CSI300, which includes the largest blue-chips trading in Shanghai and Shenzhen, fell as much as 2.1% before paring losses to trade down 0.8% in mid afternoon. It’s holding at levels not seen since late January 2019.

The CSI1000 index of the small cap A-share counters was down more than 5% in mid afternoon trade after earlier dipping by as much as almost 9%.

However, the most liquid offshore China listings in Hong Kong diverged from its onshore peers. The H-share index was down by as much as 1.5% before reversing losses to trade up 0.9%

After onshore markets tumbled as much as 3% before paring losses Friday, the China Securities Regulatory Commission pledged on Sunday to protect the interests of investors, including cracking down on illegal activities such as malicious short selling, insider trading and fraud.

A cut in the cash reserves banks in the mainland have to maintain kicked in Monday, and will likely ease a cash crunch in the last week of trading before a week-long Lunar New Year holiday.

— Clement Tan

The U.S. Federal Reserve is in no need to be in a “rush” to cut interest rates, according to JPMorgan Asset Management as more economic data pointed to a robust U.S. economy.

Federal Reserve Chair Jerome Powell poured cold water over market expectations for faster interest rates cuts and said in an interview aired Sunday that the central bank will proceed carefully with its tightening cycle and likely will move at a considerably slower pace.

“Why risk potentially causing inflation to reaccelerate? I think that’s what he (Powell) was thinking and our base case is that probably come June, they’ll start to think about cutting rates,” Jonathan Liang, Asia ex-Japan head of fixed income investment specialists at JPMorgan Asset Management told CNBC’s “Squawk Box Asia.”

Liang said he expects four rate cuts by the Fed of 25 basis points each starting in June, but warned that if what Powell said causes any tightening in financial conditions then the U.S. economy may not be as strong while entering the second half of this year.

“And then maybe they may have to cut a little bit more,” Liang said.

Data on Friday showed U.S. nonfarm payrolls expanded by 353,000 in January, nearly double of the Dow Jones estimate for 185,000 additions. Jobless rate for the months held at 3.7%, against the estimate for 3.8%.

— Shreyashi Sanyal

Shares of Mitsui Fudosan jumped as much as 11.8% in afternoon trading to hit a record 4,100 yen.

The Financial Times reported that U.S. activist investment firm Elliott Management had called upon Japan’s largest property group to launch a 1 trillion yen ($6.74 billion) buyback plan.

The report said Elliott had also demanded the company sell down its $3.6 billion stake in Oriental Land, which runs Tokyo Disneyland, citing people familiar with both Elliott and Mitsui.  

Shares of Oriental Land fell 3.2%. Mitsui currently owns a 5.4% stake in Oriental Land, according to LSEG data, making it Oriental’s second largest stakeholder.

The broader Topix was up 0.7%, while the Nikkei 225 added 0.6%.

— Shreyashi Sanyal

In an interview with CBS’ “60 Minutes” on Sunday, Fed Chair Jerome Powell said that the Fed would move “carefully” on lowering interest rates and indicated that the market may be betting on too many cuts.

“We want to see more evidence that inflation is moving sustainably down to 2%,” Powell added. “Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates,” Powell told 60 Minutes’ Scott Pelley, according to a transcript from CBS.

“We’ll update [the outlook] at the March meeting. I will say, though, nothing has happened in the meantime that would lead me to think that people would dramatically change their forecasts,” Powell added.

— Jesse Pound, Jeff Cox

Here are the market stats from last week:

• The Dow gained 1.43% for the week, its fourth positive week in a row.
• The S&P 500 gained 1.38% for the week, its fourth positive week in a row.
• The Nasdaq Composite gained 1.12% for the week, its fourth positive week in a row.
• All three major averages have risen in 13 of the past 14 weeks.

— Jesse Pound, Christopher Hayes

Stock futures were quiet when trading began at 6 p.m. in New York, with the three major futures contracts all trading within 0.1% of their previous close.

— Jesse Pound