Futures higher after rally on Powell's dovish remarks

[July 11, 2019]  By Medha Singh

(Reuters) - U.S. stock futures advanced on Thursday, a day after Wall Street's main indexes touched new highs after dovish comments from Federal Reserve chairman Jerome Powell cemented the case for an interest rate cut this month.

Traders now see a one-in-three chance of a 50 basis point rate cut at the July 30-31 meeting. Such bets had nearly dissipated after a strong June jobs report on Friday.

In the first day of testimony before the Congress, Powell said the U.S. economy is still under threat from disappointing factory activity, tame inflation and a simmering trade war. His two-day testimony resumes at 10:00 a.m. ET on Thursday.

Hopes that the Fed would step in to cushion any hit to a record U.S. economic expansion have helped Wall Street's main indexes resume their rally after a slump in May.

The benchmark S&P 500 <.SPX> has climbed about 19% this year and crossed the 3,000 point mark for the first time. The blue-chip Dow has risen 15%, while the tech-laden Nasdaq has gained 24%.

Helping the mood, China's commerce ministry said on Thursday Beijing and Washington can find a way to resolve their trade dispute if legitimate concerns are taken into consideration.

At 6:52 a.m. ET, Dow e-minis <1YMcv1> were up 58 points, or 0.22%. S&P 500 e-minis <EScv1> were up 6.5 points, or 0.22% and Nasdaq 100 e-minis <NQcv1> were up 19.75 points, or 0.25%.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid

As tame U.S. inflation continues to worry, the Labor department's June consumer price index (CPI) data will be closely watched. Economists polled by Reuters expect consumer price index to remain unchanged in June after edging 0.1% higher in May. The data is due at 8:30 a.m. ET.

In premarket trade, the so-called FAANG group - Facebook Inc <FB.O>, Apple Inc <AAPL.O>, Alphabet Inc <GOOGL.O>, Netflix Inc <NFLX.O> and Amazon.com Inc <AMZN.O> - were up between 0.3% and 0.6%.

Delta Air Lines Inc <DAL.N> rose 2.2% after reporting a 39.3% rise in quarterly profit, as the carrier benefited from higher fares and flying fuller planes. This comes a day after American Airlines Group Inc <AAL.O> raised its estimate for second-quarter unit revenue. Shares of American, United Airlines Holdings <UAL.N> and Southwest Airlines Co <SUV.N> rose between 0.5% and 1.3%.

(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)

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