Futures slip ahead of inflation numbers; China data raises demand fears
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[July 10, 2023] (Reuters)
- U.S. stock index futures edged lower on Monday as investors stayed on
the sidelines ahead of a key inflation report, while weak data out of
China fanned worries of a looming economic slowdown.
All eyes will be on U.S. inflation data this week that will feed into
the Federal Reserve's interest rate decision later in the month. A
Reuters poll of economists showed growth in consumer prices is likely to
have slowed in June.
Wall Street's main indexes ended the week lower on Friday after a mixed
jobs report showed the domestic economy added the fewest jobs in 2-1/2
years in June, although a decline in unemployment and a
higher-than-anticipated wage growth pointed to a still strong labor
market.
Traders still expect the U.S. central bank to raise rates by 25 basis
points later this month but are divided on the rate hike trajectory for
the rest of the year as they await June consumer price index (CPI) due
on Wednesday.
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The second-quarter earnings reporting period kicks off this week and
investors will assess the impact of tight monetary conditions and fears
of an impending looming economic slowdown on businesses.
JPMorgan Chase, Citigroup and BlackRock are expected to report on
Friday.
Overall, earnings for the S&P 500 constituents are expected to fall 5.7%
in the second quarter, Refintiv data showed.
Also dampening the mood, Chinese consumer price figures for June
teetered on the edge of deflation for the first time in over two years,
while producer prices fell at their fastest pace in over seven years,
adding to concerns about the health of the world's second-largest
economy.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., July 7, 2023.
REUTERS/Brendan McDermid
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At 5:41 a.m. ET, Dow e-minis were down 9 points, or 0.03%, S&P 500
e-minis were down 8.25 points, or 0.19%, and Nasdaq 100 e-minis were
down 52.75 points, or 0.35%.
U.S. listed shares of Chinese automakers including Xpeng, Li Auto
and NIO fell between 1.0% and 2.4% in premarket trading after China
Association of Auto Manufacturers (CAAM) retracted a pledge over the
weekend to avoid "abnormal pricing".
In a bright spot, Ichan Enterprises added 4.9% after a report said
Carl Icahn and banks have finalized amended loan agreements that
untie the activist investor's personal loans from the trading price
of his firm.
Later in the day, investors will watch out for comments from Fed
speakers including Fed Vice Chair Michael Barr, Cleveland Fed
President Loretta Mester and Atlanta Fed President Raphael Bostic
for clues on the path of the U.S. monetary policy.
(Reporting by Johann M Cherian in Bengaluru; Editing by Saumyadeb
Chakrabarty)
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