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Post: Market Snapshot: U.S. stock futures slightly firmer ahead of Fed’s favorite inflation gauge

U.S. stock index futures traded flat to higher early Friday, as investors looked ahead to an update on the Federal Reserve’s favorite inflation indicator, though major indexes are poised for weekly gains after a seven week losing streak.

How are stock-index futures trading?

On Thursday, the Dow industrials

rallied 516.91 points, or 1.6%, to 32,637.19, a fifth-straight gain and its longest winning streak since March 18, according to Dow Jones Market Data. The S&P 500

rose 2% to 4,057.84 and the Nasdaq Composite

rose 2.7% to 11,740.65.

All three indexes are looking at gains of 3% to 4% for the week. The S&P 500 is poised for its first weekly gain in eight weeks, according to FactSet.

What’s driving the markets?

Investors will focus on a heavy load of economic data on Friday, with the Fed’s preferred inflation gauge, the core personal consumption expenditure index deflator, in the spotlight. The core PCE is expected to have gained 4.9% in April annually, a drop from 5.2% in March, according to economists polled by Dow Jones Newswires and The Wall Street Journal.

And: What if we get a ‘soft landing’ for the economy after all?

Investors will also get disposable income and consumer spending for the same month, along with advance international trade in goods, all at 8:30 a.m. Eastern Time. The University of Michigan’s final consumer sentiment index for May is due at 10 a.m. Eastern.

“Personal spending is expected to be up 0.7% in April, compared with 1.1% in March,” Sophie-Lund Yates, lead equity analyst at Hargreaves Lansdown, told clients in a note. “A weaker number in today’s announcement would give further reason to expect that the Fed’s next rate decision will be to pause, rather than increase – as it suggests inflation’s core is having some of its energy sapped on its own.”

Thursday’s gains in stocks stemmed from some relief over the Fed’s latest minutes, which drove speculation over for a potential pause later this year by the central bank to assess interest rates. A hardy batch of earnings reports from retailers also helped boost markets.

Read: Forget the ‘Fed put’ – here is how corporate buybacks could rescue stocks

Big Lots Inc.

shares sank 20% after the big-box retailer swung to a surprise loss and sales miss. Stock in Gap Inc.

tumbled 15% after the clothing retailer reported a wider-than-expected loss and disappointing forecast. Costco Wholesale Corp.

raked in $1 billion more than expected in revenue in its latest quarter, but missed on same-store sales and shares slipped 1% in premarket.

While major U.S. stock indexes are poised for gains his week, wariness remains among strategists over whether Wall Street volatility may have ebbed for now. “The equity market reacted exuberantly to the near term recession fears abating, but the haven bid has not faded from the Treasury market,” said Michael O’Rourke, chief market strategist at JonesTrading,

“It is only a matter of time before yields are back above 3%. If it happens in the next few days, that month end rebalance will flip. Fading recession fears and the prospect of China reopening is setting the stage for energy to breakout,” as crude and natural-gas prices remain elevated, he said.

“The upward inflation spiral is teetering on heading to a very painful place. As
we have noted repeatedly, the longer markets continue to deny the reality of the need to reprice and tighten financial conditions, the more leeway the FOMC has to continue to tighten,” said O’Rourke.

See: Even this pessimistic Bank of America strategist says the bear-rally bandwagon has room to charge ahead

What companies are in focus?
How are other assets trading?
  • The yield on the 10-year Treasury note  

     fell 2 basis points to 2.726%. Yields and Treasury prices move opposite each other.

  • The ICE Dollar Index 
     which measures the greenback against major currencies, was up 0.2%.

  • Oil futures  

     fell, with West Texas Intermediate crude for July delivery 

      down 0.7% to $113.26 a barrel. Gold 

     for June delivery rose 0.4% to $1,856.30 an ounce.

  • Bitcoin 

      was off 2.4% to $28,930.

  • In European equities, the Stoxx Europe 600 

     rose 0.8%, while London’s FTSE 100  

    gained 0.2%.

  • In Asia, the Shanghai Composite 

    rose 0.2%, while Hong Kong’s Hang Seng Index 

     rose 2.8% and Japan’s Nikkei 225 index 

    rose 0.6%.

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