Futures Pointing To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a modestly higher open on Thursday, with stocks likely to see initial strength as traders digest a slew of key U.S. economic data.

The futures remained positive even after the Labor Department released a report showing producer prices increased by much more than expected in the month of February.

The Labor Department said its producer price index for final demand climbed by 0.6 percent in February after rising by 0.3 percent in January. Economists had expected producer prices to rise by another 0.3 percent.

The report also said the annual rate of producer price growth accelerated to 1.6 percent in February from a revised 1.0 percent in January.

Economists had expected the year-over-year price growth to rise to 1.1 percent from the 0.9 percent originally reported for the previous month.

Meanwhile, the Commerce Department released a report showing retail sales rebounded in the month of February, although the increase fell short of economist estimates.

The Commerce Department said retail sales climbed by 0.6 percent in February after slumping by a revised 1.1 percent in January.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.8 percent decrease originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales rose by 0.3 percent in February after falling by 0.8 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

The Labor Department also released a report showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended February 9th.

The report said initial jobless claims slipped to 209,000, a decrease of 1,000 from the previous week’s revised level of 210,000.

Economists had expected jobless claims to inch up to 218,000 from the 217,000 originally reported for the previous week.

Following the significant rebound seen during Tuesday’s session, stocks turned in a relatively lackluster performance during trading on Wednesday. The major averages spent most of the day on opposite sides of the unchanged line before closing mixed.

While the Dow inched up 37.83 points or 0.1 percent to 39,043.32, closing higher for the third consecutive session, the S&P 500 dipped 9.96 points or 0.2 percent to 5,165.31 and the Nasdaq slid 87.87 points or 0.5 percent to 16,177.77.

The pullback by the Nasdaq partly reflected weakness in the tech sector, with AI darling Nvidia (NVDA) slumping by 1.1 percent.

Overall trading activity remained somewhat subdued, however, as a lack of major U.S. economic kept some traders on the sidelines ahead of the release of several key reports.

On Friday, trading may be impacted by reaction to reports on import and export prices, industrial production and consumer sentiment.

The University of Michigan’s preliminary report on consumer sentiment in March may be in focus, as it includes reading on inflation expectations.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Energy stocks saw considerable strength, however, with a sharp increase by the price of crude oil contributing to the strength in the sector.

With crude for April delivery spiking $2.16 to $79.72 a barrel, the NYSE Arca Oil Index surged by 2.3 percent and the Philadelphia Oil Service Index shot up by 1.9 percent.

An increase by the price of gold also contributed to considerable strength among gold stocks, as reflected by the 2.2 percent jump by the NYSE Arca Gold Bugs Index.

On the other hand, semiconductor stocks showed a significant move to the downside, dragging the Philadelphia Semiconductor Index down by 2.5 percent.

Commodity, Currency Markets

Crude oil futures are climbing $0.74 to $80.46 a barrel after surging $2.16 to $79.72 a barrel on Wednesday. Meanwhile, after rising $14.70 to $2,180.80 an ounce in the previous session, gold futures are falling $11.70 to $2,169.10 an ounce.

On the currency front, the U.S. dollar is trading at 147.65 yen versus the 147.76 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0939 compared to yesterday’s $1.0948.

Asia

Asian stocks moved in a tight range before ending mixed on Thursday, as investors looked ahead to the release of U.S. producer price inflation, retail sales and jobless claims data due out later in the day for cues on inflation and interest rates.

The dollar index held steady in Asian trading, while gold ticked lower after surging to record highs earlier this week.

Oil held overnight gains, with Brent crude futures nearing 2024 highs after Ukraine attacked major Russian oil refineries with drones and the EIA and API reported lower U.S. stockpiles.

China’s Shanghai Composite Index slipped 0.2 percent to 3,038.23 ahead of upcoming new loans data and the PBOC rate decision.

Hong Kong’s Hang Seng Index dropped 0.7 percent to 16,961.66 ahead of earnings announcements next week.

While tech stocks led losses, property developers Longfor Group and China Resources Land advanced on expectations authorities will roll out more policies to support the sector.

Japanese shares rebounded after three days of losses on jitters ahead of next week’s BOJ policy meeting.

Recent data and the outcome of the spring wage negotiations have laid the ground for some speculation over the central bank ending its negative interest rate and yield curve control policies.

The Nikkei 225 Index edged up 0.3 percent to 38,807.38, while the broader Topix Index settled 0.5 percent higher at 2,661.59.

Seoul stocks rose sharply, with the Kospi climbing 0.9 percent to 2,718.76 – extending gains for a third straight session to hit an almost two-year high. Financials and automakers led the upward march.

Australian markets ended in the red, with banks and information technology stocks leading losses ahead of next week’s interest rate decision.

The benchmark S&P ASX 200 Index slipped 0.2 percent to 7,713.60, while the broader All Ordinaries Index closed 0.2 percent lower at 7,974.

Mining giant BHP rallied 2.7 percent after a jump in copper prices. Rare earths miner Arafura surged almost 77 percent after the Commonwealth Government approved a $533 million debt finance package to support the company’s Nolans Project.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index finished marginally lower at 11,808.33.

Europe

European stocks are mostly higher in cautious trading on Thursday amid bets the European Central Bank will likely lower borrowing costs in the spring.

“It’s perhaps more probable in June — we are very pragmatic and will see depending on the data,” Bank of France Governor Francois Villeroy de Galhau said on France Info radio. Spring in Europe is from April to June 21.

On a light day on the economic front, final data from the statistics office INE showed Spanish inflation softened to a six-month low in February, as initially estimated.

Consumer price inflation weakened to 2.8 percent in February from 3.4 percent in the prior month. The rate came in line with estimate and was the lowest since last August.

The EU harmonized inflation also hit a six-month low of 2.9 percent, as estimated, down from 3.5 percent in January.

The French CAC 40 Index has advanced by 0.8 percent and the German DAX Index has risen by 0.3 percent, although the U.K.’s FTSE 100 Index is just below the unchanged line.

Encavis AG has soared as private equity firm KKR launched a 2.8 billion-euro ($3.06 billion) takeover offer for the German independent power producer.

K&S has also surged after the salt and potash miner beat expectations on annual results and offered better-than-expected guidance.

British meal delivery company Deliveroo has also advanced after reporting better-than-expected core earnings of 85 million pounds ($109 million) for 2023.

Savills has also risen after the commercial and residential estate agent reported resilient performance in challenging markets for the full year ending 31 December 2023.

IG Group Holdings has also jumped. The online trading platform posted an increase in revenue in the third quarter despite a drop in market volatility.

Homebuilder Vistry has also shown a notable move to the upside after reporting increased full-year profits and revenue.

On the other hand, container shipper Hapag-Lloyd has moved significantly lower after warning of a fall in earnings this year.

Specialty chemicals maker Lanxess has also slumped after reporting a wider fourth quarter loss, while airline EasyJet has declined after pricing a debt issue.

U.S. Economic Reports

Retail sales in the U.S. rebounded in the month of February, according to a report released by the Commerce Department on Thursday, although the increase fell short of economist estimates.

The Commerce Department said retail sales climbed by 0.6 percent in February after slumping by a revised 1.1 percent in January.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.8 percent decrease originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales rose by 0.3 percent in February after falling by 0.8 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

The Labor Department also released a report on Thursday showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended February 9th.

The report said initial jobless claims slipped to 209,000, a decrease of 1,000 from the previous week’s revised level of 210,000.

Economists had expected jobless claims to inch up to 218,000 from the 217,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also dipped to 208,000, a decrease of 500 from the previous week’s revised average of 208,500.

A separate report released by the Labor Department on Thursday showed producer prices in the U.S. increased by much more than expected in the month of February.

The Labor Department said its producer price index for final demand climbed by 0.6 percent in February after rising by 0.3 percent in January. Economists had expected producer prices to rise by another 0.3 percent.

The report also said the annual rate of producer price growth accelerated to 1.6 percent in February from a revised 1.0 percent in January.

Economists had expected the year-over-year price growth to rise to 1.1 percent from the 0.9 percent originally reported for the previous month.

At 10 am ET, the Commerce Department is due to release its report on business inventories in the month of January. Business inventories are expected to rise by 0.2 percent in January after climbing by 0.4 percent in December.

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