The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to extend the choppy trading session in the previous session.
Traders may initially remain reluctant to make significant moves as they digest a substantial batch of U.S. economic data.
The slew of data included a report from the Commerce Department showing an unexpected increase in retail sales in the month of August, although the sales growth followed a revised decrease in July.
The report showed retail sales rose by 0.3 percent in August following a revised 0.4 percent decrease in July. Economists had expected retail sales to come in unchanged, matching the unchanged reading originally reported for the previous month.
Excluding a rebound in auto sales, retail sales fell by 0.3 percent in August following a revised unchanged reading in July.
Ex-auto sales were expected to inch up by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.
A separate report released by the Labor Department unexpectedly showed another modest decrease in first-time claims for U.S. unemployment benefits in the week ended September 10th.
The Labor Department said initial jobless claims slipped to 213,000, a decrease of 5,000 from the previous week’s revised level of 218,000.
Economists had expected jobless claims to inch up to 226,000 from the 222,000 originally reported for the previous week.
With the unexpected dip, jobless claims fell to their lowest level since hitting 202,000 in the week ended May 28, 2022.
Meanwhile, the Labor Department released a report showing a continued decrease in U.S. import prices in August, while may help offset recent inflation concerns.
The Labor Department said import prices slid by 1.0 percent in August after tumbling by a revised 1.5 percent in July.
Economists had expected import prices to decrease by 1.2 percent compared to the 1.4 percent slump originally reported for the previous month.
The report also showed export prices dove by 1.6 percent in August after plummeting by a revised 3.7 percent in July.
Export prices were expected to decline by 1.1 percent compared to the 3.3 percent plunge originally reported for the previous month.
Following the substantial pullback seen on Tuesday, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day swinging back and forth across the unchanged line.
The major averages moved to the upside going into the close, managing to end the day in positive territory. While the Nasdaq climbed 86.10 points or 0.7 percent to 11,719.68, the S&P 500 rose 13.32 points or 0.3 percent to 3,946.01 and the Dow inched up 30.12 points or 0.1 percent to 31,135.09.
The choppy trading on the day came as traders seemed reluctant to make significant moves following recent volatility, which saw the major averages nearly wipe out their recent recovery rally with their worst day since June 2020.
Concerns about the outlook for interest rates continue to weigh on the markets after Tuesday’s hotter-than-expected consumer price inflation report.
The data has led to worries the Federal Reserve could raise interest by 100 basis points after next week’s monetary policy meeting.
CME Group’s FedWatch Tool is currently indicating a 72.0 percent chance of a 75 basis point rate hike and a 28.0 percent chance of a 100 basis point rate hike.
Partly offsetting the inflation worries, the Labor Department released a separate report this morning showing a modest decrease in U.S. producer prices in the month of August.
The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after falling by a revised 0.4 percent in July.
Economists had expected producer prices to dip by 0.1 percent compared to the 0.5 percent drop originally reported for the previous month.
The report also showed the annual rate of growth in producer prices slowed to 8.7 percent in August from 9.8 percent in July, roughly in line with estimates.
Traders may also have decided to stick to the sidelines ahead of the release of a slew of U.S. economic data on Thursday, including reports on weekly jobless claims, retail sales and industrial production.
While most of the major sectors ended the day showing only modest moves, energy stocks saw significant strength amid a notable increase by the price of crude oil.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index surged by 3.3 percent and the NYSE Arca Oil Index shot up by 2.4 percent.
The NYSE Arca Natural Gas Index also spiked by 3.2 percent, as the price of natural gas for October delivery soared $0.83 or 10.0 percent to $9.114 per million BTUs.
Semiconductor and networking stocks also saw considerable strength, while steel stocks saw substantial weakness, dragging the NYSE Arca Steel Index down by 4.3 percent.
Interest rate-sensitive commercial real estate and housing stocks also showed notable moves to the downside on the day.
Commodity, Currency Markets
Crude oil futures are slumping $1.64 to $86.84 a barrel after jumping $1.17 to $88.48 a barrel a barrel on Wednesday. Meanwhile, after falling $8.30 to $1,709.10 an ounce in the previous session, gold futures are sliding $15.80 to $1,693.30 an ounce.
On the currency front, the U.S. dollar is trading at 143.25 yen versus the 142.90 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0010 compared to yesterday’s $0.9981.
Asia
Asian stocks turned in a mixed performance on Thursday, as investors assessed the impact of large interest rate hikes by the Federal Reserve on global growth.
The European gas crisis, high inflation and the pace of global monetary policy tightening are taking a heavy toll on economic prospects, rating agency Fitch said while slashing its global GDP forecast to 2.4 percent in 2022 and 1.7 percent in 2023.
The dollar was firm and bond yields rose ahead of next week’s Federal Reserve meeting, while oil prices edged lower in Asian trading.
China’s Shanghai Composite Index slumped 1.2 percent to 3,199.92 after the country’s central bank kept its key policy rate unchanged.
Hong Kong’s Hang Seng Index rose 0.4 percent to 18,930.98 after the Chinese megacity of Chengdu eased lockdown restrictions in some areas. Property developers rallied amid signs of relaxation measures to boost the embattled sector.
Japanese shares edged up slightly as the yen returned to a downward path despite caution over possible yen-buying intervention by Japanese monetary authorities.
The Nikkei 225 Index inched up 0.2 percent to 27,875.91, while the broader Topix closed 0.2 percent higher at 1,950.43. Technology and tourism-relates shares led the uptick, with Tokyo Electron, Japan Airlines and ANA Holdings climbing 1-2 percent.
Seoul stocks closed lower for a second day running on concerns that U.S. inflation is entering a more stubborn, entrenched phase and that the Fed fund rate would peak at about 4.4 percent next year. The Kospi dropped 0.4 percent to 2,401.83.
Biotech and IT stocks were among the biggest decliners. Samsung Biologics slid 2.5 percent and Samsung Electronics shed 1.4 percent.
Australian stocks eked out modest gains as solid jobs data supported the case for the Reserve Bank to keep up its pace of monetary tightening.
The benchmark S&P/ASX 200 Index edged up 0.2 percent to 6,842.90, while the broader All Ordinaries Index ended 0.2 percent higher at 7,082.50.
Higher crude prices lifted energy socks, with Woodside Energy and Santos rallying 4.3 percent and 3.5 percent, respectively. The big four banks rose 1-3 percent.
Lithium developer Lake Resources plummeted 12.7 percent amid news of a disagreement between the company and its Kachi Project partner.
Europe
European stocks are experiencing choppy trading on Thursday after seeing heavy losses in the two previous sessions on worries about high inflation and the impact of aggressive policy tightening on growth.
On the economic front, U.K. consumer confidence slipped into negative territory for the first time since June 2020, while French consumer price inflation slowed less than expected in August, separate reports showed.
Elsewhere, German wholesale price inflation eased for the fourth month in a row in August but remained at an elevated level.
While the U.K.’s FTSE 100 Index is up by 0.3 percent, the German DAX Index is down by 0.3 percent and the French CAC 40 Index is down by 0.6 percent.
Spanish lenders Bankinter, Sabadell and Caixabank have all jumped on reports Madrid could modify a bank tax to avoid conflicts with the European Central Bank.
Miners Antofagasta and Anglo American have also risen after a flurry of Chinese cities announced measures to boost housing demand. Commodity trader Glencore has also surged.
Wizz Air Holdings has also rallied. The low-cost airline said it has exercised an option with Airbus SE to buy 75 Airbus A321neo aircraft as per the agreement signed last November.
Avation has also spiked. The commercial passenger aircraft leasing company said it would return to net profit in fiscal 2022 following a recovery in the performance of the company and the sector.
On the other hand, shares of H&M have fallen after the fashion retailer posted lower-than-expected quarterly sales.
E-commerce retailer THG have also shown a substantial move to the downside after reporting a wider first-half loss.
Uniper has edged lower in choppy trade on news that the German government could end up taking a majority stake in the ailing gas importer.
U.S. Economic Reports
The Commerce Department released a report on Thursday showed an unexpected increase in U.S. retail sales in the month of August.
The report showed retail sales rose by 0.3 percent in August following a revised 0.4 percent decrease in July. Economists had expected retail sales to come in unchanged, matching the unchanged reading originally reported for the previous month.
Excluding a rebound in auto sales, retail sales fell by 0.3 percent in August following a revised unchanged reading in July.
Ex-auto sales were expected to inch up by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.
A separate report released by the Labor Department unexpectedly showed another modest decrease in first-time claims for U.S. unemployment benefits in the week ended September 10th.
The Labor Department said initial jobless claims slipped to 213,000, a decrease of 5,000 from the previous week’s revised level of 218,000.
Economists had expected jobless claims to inch up to 226,000 from the 222,000 originally reported for the previous week.
With the unexpected dip, jobless claims fell to their lowest level since hitting 202,000 in the week ended May 28, 2022.
Meanwhile, the Labor Department released a report showing a continued decrease in U.S. import prices in August, while may help offset recent inflation concerns.
The Labor Department said import prices slid by 1.0 percent in August after tumbling by a revised 1.5 percent in July.
Economists had expected import prices to decrease by 1.2 percent compared to the 1.4 percent slump originally reported for the previous month.
The report also showed export prices dove by 1.6 percent in August after plummeting by a revised 3.7 percent in July.
Export prices were expected to decline by 1.1 percent compared to the 3.3 percent plunge originally reported for the previous month.
The Federal Reserve Bank of New York also released a report on Thursday showing a notable rebound in regional manufacturing activity in the month of September.
The New York Fed said its general business conditions index surged to a negative 1.5 in September from a negative 31.3 in August, although a negative reading still indicates a contraction in regional manufacturing activity.
Economists had expected the index to climb to a negative 13.0.
Looking ahead, the New York Fed said firms were not very optimistic that business conditions would improve over the next six months.
Philadelphia-area manufacturing activity unexpectedly contracted in the month of September, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its current general activity index slumped to a negative 9.9 in September from a positive 6.2 in August, with a negative reading indicating a contraction in regional manufacturing activity.
Economists had expected the Philly Fed index to drop to a positive 2.8.
Looking ahead, the Philly Fed said expectations for growth over the next six months were subdued, as the future general activity index improved but remained negative.
At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of August. Industrial production is expected to inch up by 0.2 percent in August after climbing by 0.6 percent in July.
The Commerce Department is due to release its report on business inventories in the month of July at 10 am ET. Business inventories are expected to increase by 0.8 percent in July after jumping by 1.4 percent in June.
At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auction of twenty-year bonds.
Stocks In Focus
Shares of Arconic (ARNC) are moving sharply lower in pre-market trading after the aluminum products maker lowered its full-year guidance to reflect the impact of operational issues and the combination of demand declines and higher unhedged energy costs in Europe.
Alternative energy company NextEra Energy (NEE) may also move to the downside after announcing it intends to sell $2.0 billion of equity units. NextEra said it expects to use the proceeds to fund investments in energy and power projects and for other general corporate purposes.
Meanwhile, Railroad companies like Union Pacific (UNP), CSX Corp. (CSX) and Northern Southern (NSC) may see initial strength after the White House announced a tentative agreement to avoid an economically damaging freight railroad strike.
Shares of Danaher (DHR) are also moving higher in pre-market trading after the medical technology company announced plans to spin off its Environmental & Applied Solutions segment to create an independent, publicly traded company.
Slew Of Economic Data May Lead To Choppy Trading On Wall Street
2022-09-15 12:59:40
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