Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to show a lack of direction after ending the previous session modestly lower.

The futures remained little changed after the Labor Department released a report showing producer prices in the U.S. were unexpectedly unchanged in September.

The Labor Department said its producer price index for final demand came in flat in September after rising by 0.2 percent in August. Economists had expected producer prices to inch up by 0.1 percent.

The report also said the annual rate of growth by producer prices slowed to 1.8 percent in September from an upwardly revised 1.9 percent in August.

Economists had expected the annual rate of producer price growth to dip to 1.6 percent from the 1.7 percent originally reported for the previous month.

Traders are also digesting earnings news from big-name banks, with shares of Wells Fargo (WFC) moving sharply higher in pre-market trading after the company reported better than expected third quarter earnings.

JPMorgan Chase (JPM) may also move to the upside after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

After turning in a strong performance in Wednesday’s session, stocks saw modest weakness during trading on Thursday. The major averages all gave back ground, with the Dow and the S&P 500 pulling back off Wednesday’s record closing highs.

The major averages moved to the upside going into the close of trading but remained in the red. The Dow slipped 57.88 points or 0.1 percent to 42,454.12, the Nasdaq edged down 9.57 points or 0.1 percent to 18,282.05 and the S&P 500 dipped 11.99 points or 0.2 percent to 5,780.05.

The modest weakness on Wall Street came following the release of a highly anticipated Labor Department report showing consumer prices in the U.S. increased by slightly more than expected in the month of September.

The Labor Department said its consumer price index rose by 0.2 percent in September, matching the increase seen in August. Economists had expected consumer prices to inch up by 0.1 percent.

The report also said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent for the second consecutive month. Core prices were expected to rise by 0.2 percent.

Meanwhile, the Labor Department said the annual rate of consumer price growth slowed to 2.4 percent in September from 2.5 percent in August. Economists had expected the pace of price growth to slow to 2.3 percent.

The annual rate of core consumer price growth accelerated to 3.3 percent in September from 3.2 percent in August, while economists had expected the pace of growth to remain unchanged.

The bigger than expected increase by consumer prices further offset optimism the Federal Reserve will continue to aggressively lower interest rates in the coming months.

CME Group’s FedWatch Tool is currently indicating an 84.0 percent chance the Fed will lower rates by 25 basis points next month after slashing rates by 50 basis points last month.

Following the data, Atlanta Federal Reserve President Raphael Bostic told the Wall Street Journal he was “definitely open” to leaving interest rates unchanged in November.

Negative sentiment was also generated in reaction to a separate Labor Department report showing first-time claims for U.S. unemployment benefits increased by much more than expected in the week ended October 5th.

The report said initial jobless claims climbed to 258,000, an increase of 33,000 from the previous week’s unrevised level of 225,000. Economists had expected jobless claims to edge up to 230,000.

With the much bigger than expected increase, jobless claims reached their highest level since hitting a matching figure in the week ended August 5th, 2023.

Housing stocks saw considerable weakness on the day, resulting in a 1.2 percent decrease by the Philadelphia Housing Sector Index.

Notable weakness was also visible among telecom stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca North American Telecom Index.

Networking, commercial real estate and computer hardware stocks also saw some weakness, while gold stocks moved sharply higher amid an increase by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are falling $0.52 to $75.33 a barrel after surging $2.61 to $75.85 a barrel on Thursday. Meanwhile, after climbing $13.30 to $2,639.30 an ounce in the previous session, gold futures are jumping $25.60 to $2,664.90 an ounce.

On the currency front, the U.S. dollar is trading at 149.21 yen versus the 148.57 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0930 compared to yesterday’s $1.0934.

Asia

Asian stocks ended mixed on Friday as investors waited to see whether Beijing will deliver more fiscal stimulus at a press conference by the finance ministry on Saturday.

The dollar weakened and gold prices surged as fresh signs of U.S. labor market weakness spurred hopes for more rate cuts.

Oil eased after a rally in the previous session but was on course for a second straight weekly gain on concerns about crude oil supply disruptions stemming from tensions in West Asia.

China’s Shanghai Composite Index tumbled 2.6 percent to 3,217.74 as investors awaited the details of the upcoming fiscal stimulus plans this weekend. Hong Kong markets remained closed on account of the Chung Yeung festival.

Japanese markets advanced on hopes for solid earning after Uniqlo clothing chain Fast Retailing provided a stronger-than-expected net profit forecast for this business year the previous day.

The Nikkei 225 Index rose 0.6 percent to 39,605.80, led by retailers and financials. The broader Topix Index settled 0.2 percent lower at 2,706.20.

Seoul stocks ended little changed, with the Kospi closing marginally lower at 2,596.91, giving up early gains after the Bank of Korea cut interest rates for the first time in four years as anticipated and flagged there was room to reduce further.

Australian markets ended slightly lower, with miners and banks underperforming. Gold miners surged, supported by higher bullion prices.

The benchmark S&P/ASX 200 Index slipped 0.1 percent to 8,214.50, while the broader All Ordinaries Index finished marginally lower at 8,491.50.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.7 percent to 12,845.64 as a survey showed activity in the country’s manufacturing sector edged up last month but remained firmly in contraction for the 19th consecutive month.

Europe

European stocks have struggled for direction on Friday as investors digest mixed regional data and look ahead to a weekend press briefing from China’s finance minister, where details on the country’s fiscal policy adjustments geared towards fostering economic revival will be revealed.

German consumer price inflation eased further as initially estimated in September to the lowest level in just over three-and-a-half years, Destatis reported earlier today.

The consumer price index registered an annual increase of 1.6 percent in September, slower than the 1.9 percent rise in August. That was in line with the flash data published on September 30.

Further, this was the lowest inflation rate since February 2021, when prices had risen 1.5 percent.

Inflation, based on the harmonized index of consumer prices, also decelerated to 1.8 percent in September from 2.0 percent a month ago.

Elsewhere, official data showed the U.K. economy returned to growth in August, but the pace of expansion was weaker than in the first half of the year.

The real economy grew 0.2 percent in August after showing nil growth in July and June, the Office for National Statistics said. The rate came in line with expectations.

While the German DAX Index is up by 0.1 percent, the French CAC 40 Index is just below the unchanged line and the U.K.’s FTSE 100 Index is down by 0.1 percent.

In corporate news, Sandoz has moved to the upside after launching a generic formulation of paclitaxel in the U.S.

Saga has soared in London after an update that it is in exclusive talks with Ageas SA/NV to form a 20-year motor and home insurance partnership and sell its underwriting business.

Likewise, Oxford Metrics has also jumped after it announced the strategic acquisition of The Sempre Group Holdings Ltd, a measurement specialist that offers high precision metrology solutions.

Recruiter Hays has also moved notably higher despite forecasting a decrease in first-half operating profit from the previous six-month period.

German online retailer Zalando has also advanced after raising its financial outlook for 2024.

On the other hand, energy giant BP has moved lower after releasing its third quarter 2024 trading statement.

U.S. Economic Reports

With a decrease in prices for goods offsetting an increase in prices for services, the Labor Department released a report on Friday showing producer prices in the U.S. were unexpectedly unchanged in September.

The Labor Department said its producer price index for final demand came in flat in September after rising by 0.2 percent in August. Economists had expected producer prices to inch up by 0.1 percent.

The report also said the annual rate of growth by producer prices slowed to 1.8 percent in September from an upwardly revised 1.9 percent in August.

Economists had expected the annual rate of producer price growth to dip to 1.6 percent from the 1.7 percent originally reported for the previous month.

At 9:45 am ET, Chicago Federal Reserve President Austan Goolsbee is due give opening remarks before the 18th Annual Community Bankers Symposium.

The University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of October at 10 am ET. The consumer sentiment index is expected to inch up to 70.8 in October after rising to 70.1 in September.

At 10:45 am ET, Dallas Federal Reserve President Lorie Logan is due participate in a panel before the Federal Home Loan Bank of Dallas Women in Financial Services Conference.

Federal Reserve Board Governor Michelle Bowman is scheduled to speak before the 18th Annual Community Bankers Symposium at 1:10 pm ET.