Martin Baccardax
Originally Published: February 15, 2024 12:12 p.m.
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U.S. equity futures moved higher again Thursday, supported by a pullback in Treasury bond yields, as investors look to build on the market’s post-inflation rebound while eyeing a busy slate of economic data prior to the opening bell.
Updated at 8:49 AM EST
Data Dump
Markets are digesting a host of 8:30 data, topped by a weaker-than-expected reading for January retail sales that calls into question the impact of Tuesday’s hotter-than-expected inflation report.
Weekly jobless claims, meanwhile, slipped by 4,000 to 212,000 over the period ending on February 10, falling inside the Street forecast of 219,000.
The Philadelphia Fed’s reading of regional manufacturing activity, meanwhile, improved to 5.2 points this month, up from a -10.6 reading in January, while a similar reading from the New York Fed showed activity improving to 21.5 points, well ahead of Street forecasts.
Stocks were modestly firmer following the release, with futures tied to the S&P 500 indicating a 7 point opening bell gain and those linked to the Dow calling for a 98 point advance.
Mixed data out of the US:
Weekly jobless claims fell to 212,000, below the consensus projection and confirming the continued strength of the labor market.
A notable miss on retail sales, however, at both the headline and core levels (-0.8% and -0.6%, respectively, compared to the…— Mohamed A. El-Erian (@elerianm) February 15, 2024
Stock Market Today
Stocks ended firmly higher Wednesday, with the S&P 500 reclaiming the 5,000-point mark it lost over the previous session following a hotter-than-expected reading of January inflation from the Labor Department.
The momentum looks set to carry over into the start of the Thursday session as Treasury yields retreat from multi-month highs as investors continue to see solid fourth-quarter earnings and a resilient economy as overcoming the temporary nudge higher in inflation prospects.
Benchmark 10-year note yields were marked around 10 basis points lower from Wednesday levels at 4.226% heading into early New York trading. Two-year notes slipped to 4.566%.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was marked 0.17% lower at 104.541 but remains nearer to three-month highs thanks to overnight weakness in the yen and the pound.
Markets are likely to focus on four key data releases prior to the opening bell, starting with the January reading for retail sales from the Commerce Department at 8:30 am Eastern Time.
Colder weather and the post-holiday spending pullback are likely to see the headline figure fall to minus 0.2%, economists estimate, while weekly jobless claims are set to hold steady at around 219,000.
Two regional readings of manufacturing activity, one from New York, the other from Philadelphia, will follow at the 8:30 am Eastern slot.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest an 8 point opening bell gain while those linked to the Dow Jones Industrial Average are priced for a 71 point advance.
The tech-focused Nasdaq, which is up 4.58% for the month on the strength of gains for Magnificent 7 names like Nvidia and Microsoft, is set for a 36 point gain.
Cisco Systems (CSCO) shares were a notable tech mover in the premarket, falling 4.4% to $48.05 after the networking-equipment giant lowered its 2024 sales forecast and said it would cut around 5% of its global workforce.
In overseas markets, two key economic readings dominated headlines, with Japan slipping into recession following a second consecutive quarter of contracting GDP growth. That pulled Japan into fourth place in terms of global economies behind Germany.
The Nikkei 225, however, rose 1.21% into the close of trading to hit a 34-year high. The economic weakness likely keeps the Bank of Japan from raising rates anytime soon, and keeps downward pressure on the yen, which continues to support exports.
In Europe, Britain’s economy also officially fell into recession, following a fourth-quarter GDP reading of -0.3%, prompting calls for the Bank of England to cut rates from the current 16-year high in the early spring.
The FTSE 100 was little changed from last night’s close in early London dealing, while the regionwide Stoxx 600 rose 0.5% in Frankfurt.
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