Futures muted ahead of key inflation data
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[January 12, 2023] (Reuters)
- U.S. stock index futures were subdued on Thursday ahead of the keenly
awaited December inflation data that would offer more clues on the
Federal Reserve's path of monetary tightening.
The inflation report, due at 8:30 a.m. ET (1330 GMT), is expected to
show U.S. consumer prices grew 6.5% year-on-year in December, moderating
from a 7.1% rise in November.
The core inflation number, which excludes prices of volatile items such
as food and fuel, is expected to moderate to 5.7% in December from 6.0%
a month ago.
"The wave of exuberance surging through markets appears to have crested
as investors turn a little more cautious ahead of an inflation snapshot
in the U.S.," said Susannah Streeter, senior investment and markets
analyst, Hargreaves Lansdown.
"Expectations that CPI data for December will show that the price spiral
is coming further down from the peak, raised hopes that policymakers
will show restraint in further rate hikes and could even cut rates by
the end of the year."
Wall Street's main indexes ended sharply higher on Wednesday, led by
major technology stocks, with the S&P 500 and Nasdaq gaining more than
1% each.
Renewed optimism that the U.S. central bank could soon ease its
aggressive policy after seven interest rate hikes in 2022 have boosted
the market in recent sessions, even as some Fed officials reiterated
their focus on bringing inflation under control.
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Traders work on the trading floor at the
New York Stock Exchange (NYSE) in New York City, U.S., January 5,
2023. REUTERS/Andrew Kelly
Money market participants see a 75% chance the Fed will raise the
benchmark rate by 25 basis points in February to 4.50%-4.75%, and
expect the terminal rate at 4.94% by June.
Investors will monitor weekly jobless data on Thursday to assess the
strength of the U.S. labor market, while commentary from a number of
Fed officials is also expected.
This week marks the start of the quarterly earnings season, with big
banks expected to report lower profits, while overall S&P 500
earnings are expected to decline year-over-year, according to
Refinitiv.
At 5:49 a.m. ET, Dow e-minis were up 1 point, S&P 500 e-minis were
down 0.5 point, or 0.01%, and Nasdaq 100 e-minis were down 11
points, or 0.1%.
Bed Bath & Beyond Inc climbed 20.9% in premarket trading, after
rising for three consecutive sessions, despite bleak quarterly
results.
Netflix Inc gained 1.6% as Jefferies raised the rating on the
company's shares to "buy".
(Reporting by Shubham Batra, Bansari Mayur Kamdar and Ankika Biswas
in Bengaluru; Editing by Shounak Dasgupta)
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