Stocks Rise, US Futures Are Steady Before CPI Data: Markets Wrap

Wall Street futures were steady and European stocks rose as traders braced for a report due later that may show US inflation is cooling, reducing pressure for aggressive rate hikes from the Federal Reserve.

(Bloomberg) — Wall Street futures were steady and European stocks rose as traders braced for a report due later that may show US inflation is cooling, reducing pressure for aggressive rate hikes from the Federal Reserve.

S&P 500 contracts were 0.1% higher. Those on the Nasdaq 100 were little changed after the technology sector, one of the most-beaten down groups during the Fed’s tightening campaign, led gains among US shares on Wednesday. American Airlines Group Inc. rose in premarket trading after its profit beat expectations.  

The benchmark European equities index advanced 0.7%, boosted by a second day of gains for real estate stocks amid hopes of an easier outlook for rates. 

Treasuries steadied, following gains in Wednesday’s session, while a gauge of dollar strength edged lower as investors looked beyond the drumbeat of hawkish comments from Federal Reserve officials. The yen rallied on a report that the Bank of Japan will look into the side effects of its ultra-loose monetary policy. 

Every aspect of Thursday’s CPI report will be scrutinized, with extra attention on core inflation, which excludes food and energy and is seen as a better indicator than the headline measure. The projected 5.7% increase would be well above the Fed’s goal, helping explain its intention of keeping rates higher for longer. But the year-over-year price growth would also show moderation.

“Core inflation remains well above target,” said Ronald Temple, chief market strategist at Lazard Ltd. “Having been late to act, the Fed is unlikely to pause the tightening cycle until inflation is definitively under control.”

In Asia, an index of the region’s shares climbed for a ninth time in 10 days as it headed for the highest level in about five months. 

Elsewhere in markets, oil rose for a sixth day on hopes US inflation is cooling and as China’s crude buying ramps up before the Lunar New Year holidays. Gold climbed ahead of the data, which may determine whether its two-month uptrend continues. 

Bitcoin gained for a ninth day, the longest winning streak for the world’s largest crypto token since 2020.

 

Key events this week:

  • US CPI, initial jobless claims, Thursday
  • St Louis Fed President James Bullard at Wisconsin Bankers Association virtual event, Thursday
  • Richmond Fed President Thomas Barkin speaks at VBA/VA Chamber, Thursday
  • China trade, Friday
  • US University of Michigan consumer sentiment, Friday
  • Citigroup, JPMorgan, Wells Fargo report earnings, Friday

This week’s MLIVE Pulse Survey:

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 7:26 a.m. New York time
  • Nasdaq 100 futures were little changed
  • Futures on the Dow Jones Industrial Average rose 0.1%
  • The Stoxx Europe 600 rose 0.7%
  • The MSCI World index rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro was little changed at $1.0765
  • The British pound rose 0.1% to $1.2160
  • The Japanese yen rose 1.3% to 130.68 per dollar

Cryptocurrencies

  • Bitcoin rose 3.7% to $18,204.83
  • Ether rose 3.9% to $1,395.52

Bonds

  • The yield on 10-year Treasuries declined two basis points to 3.52%
  • Germany’s 10-year yield declined four basis points to 2.16%
  • Britain’s 10-year yield declined seven basis points to 3.34%

Commodities

  • West Texas Intermediate crude rose 1.3% to $78.44 a barrel
  • Gold futures rose 0.5% to $1,888.80 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Youkyung Lee, Brett Miller and Michael Msika.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.