U.S. Stocks May Move To The Upside As Traders React To Inflation Data

With traders returning to their desks following the lost Easter weekend, stocks may move to the upside in early trading on Monday. The major index futures are currently pointing to a modestly higher open for the markets, with the S&P 500 futures up by 0.1 percent.

Traders finally have the opportunity to react to closely watched U.S. consumer price inflation data that was released while the markets were closed for Good Friday.

The Commerce Department report showed consumer prices rose by slightly less than expected, while the annual rate of growth accelerated in line with estimates.

The report said consumer prices rose by 0.3 percent in February after climbing by an upwardly revised 0.4 percent in January.

Economists had expected consumer prices to advance by 0.4 percent compared to the 0.3 percent increase originally reported for the previous month.

Meanwhile, the report said the annual rate of consumer price growth ticked up to 2.5 percent in February from 2.4 percent in January, in line with estimates.

Excluding food and energy prices, core consumer prices also rose by 0.3 percent in February after climbing by an upwardly revised 0.5 percent in January. The increase matched expectations.

The annual rate of core consumer price growth slowed to 2.8 percent in February from an upwardly revised 2.9 percent in January.

Economists had expected the pace of core price growth to come in unchanged compared to the 2.8 percent originally reported for the previous month.

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department’s report on personal income and spending in February.

“By the time the Fed meets in June, the data should be convincing enough for them to commence it’s rate normalization process,” Jeffrey Roach, Chief Economist for LPL Financial, said following the release of the report. “But where we sit today, markets need to have the same patience the Fed is exhibiting.”

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of March. The ISM’s manufacturing PMI is expected to inch up to 48.4 in March from 47.8 in February, although a reading below 50 would still indicate contraction.

The Commerce Department is also due to release its report on construction spending in the month of February. Construction spending is expected to climb by 0.6 percent in February after edging down by 0.2 percent in January.

Following the strong upward move seen late in Wednesday’s session, stocks showed a lack of direction over the course of the trading day on Thursday. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs.

The major averages eventually ended the session narrowly mixed. While the Nasdaq edged down 20.06 points or 0.1 percent to 16,379.46, the Dow inched up 47.29 points or 0.1 percent to 39,807.37 and the S&P 500 crept up 5.86 points or 0.1 percent to 5,254.35.

For the holiday-shortened week, the Dow advanced by 0.8 percent and the S&P 500 rose by 0.4 percent, but the Nasdaq fell by 0.3 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with several major markets closed for holidays. Japan’s Nikkei 255 Index tumbled by 1.4 percent, while China’s Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets were all closed on the day for Easter Monday.

In commodities trading, crude oil futures are slipping $0.30 to $82.87 a barrel after surging $1.82 to $83.17 a barrel last Thursday. Meanwhile, after jumping $25.70 to $2,238.40 an ounce in the previous session, gold futures are spiking $30.50 to $2,268.90 an ounce.

On the currency front, the U.S. dollar is trading at 151.44 yen versus the 151.35 yen it fetched on Friday. Against the euro, the dollar is trading at $1.0779 compared to last Friday’s $1.0790.