U.S. Budget Deficit Widened in First Four Months of Fiscal 2023

U.S. stock futures were muted as investors awaited inflation data due later this week. Futures for the S&P 500 edged up 0.1% at the time of writing, while futures for the Nasdaq Composite added 0.4% and those tied to the Dow Jones Industrial Average are nearly flat.

On Friday, U.S. stocks had their worst weekly performance of 2023 so far. The S&P 500 closed down 1.1% for the week, the Dow Jones Industrial 0.2%, and the Nasdaq Composite 2.4%.

The federal budget deficit was $459 billion in the first 4 months of fiscal year 2023, the Budget Office estimates – $200 billion more than the shortfall recorded during the same period last year. Outlays were 9 percent higher and revenues were 3 percent lower from October through January than during the same period in fiscal year 2022.

Meanwhile, Friday’s closing bell brought an end to a 5-day recovery rally for both the S&P 500, which slipped over 1.1%, and the Nasdaq, which slid more than 2.4%. While stocks have started the year an a relatively solid footing, there are certain realities keeping things in check. Thus, inflation has come down a bit, but it’s still high.

European stock benchmarks are moderately higher this Monday afternoon ahead of the week during which investors will monitor Eurozone jobs and economic growth and UK’s inflation data. As of 2:30 p.m. CET, the German DAX is edging higher by 0.50%, while the British FTSE 100 gained 0.31% and the French CAC 40 rose by 0.86%. The EURO Stoxx 600 advanced by a rather modest 0.66% at the same time.

In Asia, India's market regulator is set to brief the federal government on its investigation into Adani group's shelved share sale, two sources said, thrusting the watchdog into the limelight in a week when its laws also face scrutiny by the nation's top court. Meanwhile, the country’s inflation accelerated in January, breaching the top-end of the central bank’s target for the first time in 3 months and validating the concern of monetary authorities that price pressures are persistent and must be contained. According to data released by the Statistics Ministry on Monday, the consumer price index rose 6.52% from a year earlier. That compares with 5.72% in December and 6% median estimate in a Bloomberg survey.

China's PM Li Keqiang said earlier today that the country's economic operations stabilized at the end of 2022 and rebounded at the beginning of 2023, pointing to continuing trend of economic recovery. Hosting a symposium, Li noted that, over the past 5 years, China's annual economic growth rate averaged 5.2%, while urban employment grew on average 12.7 million per year.