Stock index futures rose slightly on Friday, as investors await more inflation data and Q2 earnings start in earnest.
S&P 500 futures (SPX) +0.1%, Nasdaq 100 futures (US100:IND) +0.1% and Dow futures (INDU) +0.1%.
The 10-year Treasury yield (US10Y) rose 2 basis points to 4.23%. The 2-year yield (US2Y) was unchanged at 4.53%. See how Treasury yields have done across the curve on the Seeking Alpha bond page.
Major banks will also report their quarterly earnings today, including JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C).
U.S. stocks on Thursday ended largely lower with some rotation, as a slide in megacap technology names along with some disappointing earnings and outlook from Delta Air Lines (DAL), PepsiCo (PEP) and Conagra (CAG) offset favorable economic data on inflation. Treasury yields plunged after the consumer price index report hit.
The markets had initially rallied after the consumer price index came in softer than expected.
“Markets got another boost yesterday, as the latest US CPI print surprised on the downside once again, which led to growing hopes that inflation was finally being tamed,” Deutsche Bank’s Henry Allen said.
“With that inflation report in hand, there was immediate speculation that the Fed might accelerate the timing of their rate cuts and announce a first cut as soon as the September meeting,” Allen added.
“June’s CPI numbers surely surpass chair Powell’s definition of ‘good’ data; they were great, with only a couple minor caveats,” Pantheon Macroeconomics said.
Traders will now turn to the wholesale inflation report that is due today before the bell. The June producer price index (PPI) is expected to see a rise of 0.1% and 2.3% on a monthly and yearly basis, respectively. The core PPI is forecasted to show a yearly gain of 2.5% and a monthly rise of 0.2%.
“U.S. producer price inflation is due today—free from a lot of the fantasy pricing, and a better reflection of corporate pricing power,” UBS’ Paul Donovan said.
The July Michigan consumer sentiment report is also due today during market hours, and is anticipated to come at 68.5.
“The Michigan consumer sentiment index probably rose slightly in July, lifted by a surging stock market,” Pantheon Macro added.