With the release of the June inflation report, traders have shed their apprehension, reflected in stock futures pointing to a higher opening on Thursday. As economic data takes center stage and the second-quarter reporting season begins, caution remains an underlying sentiment.
In Wednesday’s trading, stocks rallied as the June inflation report revealed consumer prices growing at the slowest month-over-month rate since March 2021. The major averages maintained levels above the unchanged line, with the NASDAQ Composite and S&P 500 Index reaching their highest levels since early April 2022. Most sectors advanced, except for healthcare and industrial stocks.
Analysts offered differing perspectives on the market rally. Fund manager Louis Navellier said he sees the decline in Treasury bond yields as a “very good sign,” raising the likelihood of the Federal Reserve pausing at the July meeting. “I want to assure you that everything is about to get better,” he said, adding that he expects a steady improvement in corporate earnings over the next four quarters.
On the other hand, Morgan Stanley‘s Lisa Shalett warned of potential risks, citing bond volatility, surging interest rates, and a resilient U.S. dollar.
The OPEC is due to release its monthly oil market report at 7 a.m. EDT.
The Bureau of Labor Statistics is due to release its producer price inflation report at 8:30 a.m. EDT. The headline PPI is expected to have increased by 0.2% month-over-month and 0.4% year-over-year in June. This compares to May’s 0.3% drop and 1.1% growth, respectively.
The core PPI monthly rate is expected to remain unchanged at 0.2% and its annual rate may have ticked down from 2.8% to 2.7%.
The Labor Department will also release its weekly jobless claims report at 8:30 a.m. EDT. The number of individuals claiming unemployment benefits is expected at 249,000 in the week ended July 8 compared to 248,000 in the week ended July 1.
The Treasury will auction four- and eight-week bills at 11:30 a.m. EDT and 30-year bonds at 1 p.m. EDT.
Fed Governor Christopher Waller is due to speak at 6:45 p.m. EDT.
Crude oil futures edged up 0.04% to $74.99 in early European session after the commodity rallied 1.23% on Tuesday.
The benchmark 10-year Treasury note fell 0.043 percentage points to 3.818%.
The Asian markets rallied across the board, led by the Hong Kong market, as traders digested the U.S. inflation data and weak trade data from China that increased hopes of stimuli from the government.
European stocks traded higher in late-morning trading on Thursday.
Produced in association with Benzinga
Edited by Alberto Arellano and Joseph Hammond
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