Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction after closing mixed for four consecutive sessions.

Traders may be reluctant to make significant moves as they digest separate reports from the Labor Department on weekly jobless claims and producer price inflation.

The Labor Department said initial jobless claims edged down to 375,000 in the week ended August 7th, a decrease of 12,000 from the previous week’s revised level of 387,000.

Economists had expected jobless claims to dip to 375,000 from the 385,000 originally reported for the previous week.

Meanwhile, the Labor Department released a separate report showing U.S. producer prices increased more than expected in the month of July.

The Labor Department said its producer price index for final demand surged up by 1.0 percent in July, matching the jump seen in the previous month. Economists had expected producer prices to climb by 0.6 percent.

With the bigger than expected monthly increase, the annual rate of growth in producer prices accelerated to 7.8 percent in July from 7.3 percent in June.

The year-over-year spike in producer prices reflected the largest advance since 12-month data were first calculated in November 2010.

Excluding prices for food, energy and trade services, core producer prices advanced by 0.9 percent in July after rising by 0.5 percent in June. Core prices were expected to show another 0.5 percent increase.

The annual rate of growth in core prices accelerated to 6.1 percent in July from 5.5 percent in June, showing the biggest increase since 12-month data were first calculated in August 2014.

The major U.S. stock indexes once again moved in opposite directions during trading on Wednesday, closing mixed for the fourth consecutive session. While the Dow and the S&P 500 reached new record closing highs, the tech-heavy Nasdaq finished the day modestly lower.

The Dow climbed 220.30 points or 0.6 percent to 35,484.97 and the S&P 500 rose 10.95 points or 0.3 percent to 4,447.70. Meanwhile, the Nasdaq rebounded from its worst levels of the day but still closed down 22.95 points or 0.2 percent at 14,765.14.

The mixed performance on Wall Street came after the Labor Department’s highly anticipated reading on consumer price inflation was not bad as some had feared.

The Labor Department said its consumer price index climbed by 0.5 percent in July after jumping by 0.9 percent in June.

The increase in consumer prices, which came following the biggest jump in thirteen years in the previous month, matched economist estimates.

Compared to the same month a year ago, consumer prices in July were up by 5.4 percent, unchanged from the annual rate of growth seen in June. The pace of growth was expected to dip to 5.3 percent.

Excluding higher food and energy prices, core consumer prices rose by 0.3 percent in July after surging by 0.9 percent in June. Economists had expected core prices to increase by 0.4 percent.

The annual rate of growth in core prices slowed to 4.3 percent in July from 4.5 percent in June, matching economist estimates.

While the pace of core consumer price growth remains well above the Federal Reserve’s 2 percent target, traders viewed the modest slowdown as a sign the central bank will not be in a hurry to scale back stimulus.

The Fed’s asset purchase program has helped prop up the markets throughout much of the coronavirus pandemic, making traders wary of any signs of potential tapering.

The recent resurgence in coronavirus cases may weigh on the economy, leading the Fed to put off tapering plans and allowing stocks to continue to climb to record highs.

Housing stocks moved sharply higher over the course of the session, driving the Philadelphia Housing Sector Index up by 2.7 percent to its best closing level in over two months.

Significant strength was also visible among gold stocks, as reflected by the 2.1 percent jump by the NYSE Arca Gold Bugs Index. The index rebounded after ending Tuesday’s trading at its lowest closing level in well over a year.

The rebound by gold stocks came amid a substantial increase by the price of the precious metal.

Transportation stocks also turned in a strong performance on the day, resulting in a 1.8 percent increase by the Dow Jones Transportation Average. The average ended the day at a one-month closing high.

Banking, oil service and chemical stocks also moved notably higher, while a steep drop by biotechnology stocks weighed on the tech-heavy Nasdaq.

Commodity, Currency Markets

Crude oil futures are falling $0.36 to $68.89 a barrel after jumping $0.96 to $69.25 a barrel on Wednesday. Meanwhile, after surging $21.60 to $1,753.30 an ounce in the previous session, gold futures are slipping $4.30 to $1,748.70 an ounce.

On the currency front, the U.S. dollar is trading at 110.49 yen versus the 110.43 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1733 compared to yesterday’s $1.1739.

Asia

Asian stocks ended broadly lower on Thursday amid increasing COVID-19 risks and concerns over the recent regulatory crackdown in China. The downside remained capped as a tame U.S. inflation reading suggested the Federal Reserve might not be in a hurry to tighten policy.

Chinese shares fell as weak bank lending data triggered liquidity concerns and the banking and insurance regulator said it would step up its scrutiny of online insurance companies.

The benchmark Shanghai Composite Index ended down 7.88 points, or 0.2 percent, at 3,524.74, while Hong Kong’s Hang Seng Index shed 142.34 points, or 0.5 percent, to finish at 26,517.82.

Japanese shares fell on profit taking after four days of gains. The Nikkei 225 Index slipped 55.49 points, or 0.2 percent, to 28,015.02, while the broader Topix closed marginally lower at 1,953.55.

E-commerce firm Rakuten tumbled 6.4 percent after its net loss swelled for the six months to June. Toshiba gave up 4.1 percent after the troubled industrial conglomerate left its full-year operating profit forecast unchanged.

On the positive side, advertising giant Dentsu jumped 5 percent after forecasting a return to the black for the current fiscal year.

Australian markets fluctuated before finishing on a flat note as investors fretted about the worsening domestic coronavirus situation, particularly in New South Wales.

Bulk grain handler Graincorp soared 11.7 percent after upgrading its earnings forecasts for the year for the second time since May. Wealth manager AMP rallied 3.2 percent as it posted a 57 percent jump in underlying profit for the year.

Downer EDI climbed 4.2 percent after the engineering group bounced back to a full-year profit. Insurer QBE soared 8.1 percent after boosting its dividend.

Telco Telstra jumped 3.7 percent after reporting an increase in its annual profit and announcing a A$1.35 billion ($994.68 million) share buyback.

Gold miners ended mixed despite the precious metal seeing its biggest single-day percentage gain since May 6 on Wednesday.

Seoul stocks fell for the sixth straight session as foreign investors dumped chip stocks amid fears of a drop in DRAM prices. The benchmark Kospi dropped 12.24 points, or 0.4 percent, to settle at 3,208.38 even as the country’s daily new coronavirus cases fell back slightly below 2,000, after soaring to a record high the previous day.

Samsung Electronics lost 1.9 percent and SK Hynix slumped 4.7 percent on concerns over a decline in chip prices.

Europe

European stocks are broadly higher on Thursday after moderating U.S. inflation eased concerns of earlier than expected stimulus tapering by the Federal Reserve.

The French CAC 40 Index and the German DAX Index are both up by 0.4 percent, although the U.K.’s FTSE 100 Index has bucked the uptrend and dipped by 0.2 percent.

Dutch insurer Aegon NV has shown a strong move to the upside after reporting better than expected results for the second quarter.

Zurich Insurance Group AG has also rallied. The Swiss insurer’s Group first-half business operating profit jumped 60 percent to beat expectations.

Travel agency firm TUI AG has also moved higher after it returned to cash flow for the first time since the coronavirus pandemic.

Internal combustion engine manufacturer DEUTZ has soared after confirming its 2021 guidance.

Cineworld Group has also jumped in London. The company said it was considering a plan to list its shares on Wall Street or partially float its movie chain Regal.

Stock Spirits Group shares have skyrocketed as the alcohol company agreed on a £767 million takeover offer by CVC Advisers.

Meanwhile, SGL Carbon has fallen despite the German carbon and graphite product manufacturing company delivering strong first-half results.

Chemicals and consumer goods company Henkel has also slumped after it voiced concern about rising prices and over-stretched supply chain.

Delivery Hero has also tumbled. The online food ordering company raised its gross merchandise value outlook for the full year after delivering strong performance in the second quarter.

In economic news, Eurozone industrial production declined at a slower pace in June, data published by Eurostat showed.

Industrial output was down 0.3 percent month-on-month, slower than the 1.1 percent decrease seen in May. This was the second consecutive fall. Economists had forecast a monthly drop of 0.2 percent.

On a yearly basis, industrial production growth eased to 9.7 percent in June from 20.6 percent in May.

The U.K. economy recovered strongly in the second quarter following the easing of coronavirus restrictions, the first quarterly estimates from the Office for National Statistics revealed.

Gross domestic product grew 4.8 percent sequentially in the second quarter, reversing a 1.6 percent decrease in the first quarter.

The rate matched economists’ expectations. Nonetheless, the level of GDP was 4.4 percent below its pre-pandemic level.

Another report from the ONS showed that the visible trade gap widened to GBP 11.98 billion in June from GBP 9.6 billion in May.

U.S. Economic Reports

After yesterday’s report showing U.S. consumer prices rose in line with estimates, the Labor Department released a separate report on Thursday showing U.S. producer prices increased more than expected in the month of July.

The Labor Department said its producer price index for final demand surged up by 1.0 percent in July, matching the jump seen in the previous month. Economists had expected producer prices to climb by 0.6 percent.

Excluding prices for food, energy and trade services, core producer prices advanced by 0.9 percent in July after rising by 0.5 percent in June. Core prices were expected to show another 0.5 percent increase.

At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds.

The Treasury Department is also due to announce the results of this month’s auction of $27 billion worth of thirty-year bonds at 1 pm ET.

Stocks In Focus

Shares of Sonos (SONO) are seeing significant pre-market strength after the home audio equipment maker reported an unexpected fiscal third quarter profit and raised its full-year guidance.

Analytics software company Palantir Technologies (PLTR) is also moving sharply higher in pre-market trading after reporting better than expected second quarter revenues.

On the other hand, shares of Utz Brands (UTZ) may come under pressure after the snack maker reported second quarter earnings that missed analyst estimates.

E-commerce giant eBay (EBAY) is also seeing pre-market weakness after reporting better than expected second quarter results but providing disappointing guidance.