U.S. Stocks May Move Back To The Upside Following Inflation Data

After ending the previous session modestly lower, stocks are likely to move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.

The futures turned positive following the release of a highly anticipated Commerce Department showing consumer prices in the U.S. increased in line with economist estimates in the month of January.

The Commerce Department said consumer prices rose by 0.3 percent in January after inching up by a revised 0.1 percent in December.

Economists had expected consumer prices to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding food and energy prices, core consumer prices climbed by 0.4 percent in January after edging up by a revised 0.1 percent in December. The increase in core prices also matched estimates.

Meanwhile, the report said the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December. The slowdown matched expectations.

The annual rate of core consumer price growth also slowed to 2.8 percent in January from 2.9 percent in December, in line with estimates.

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 the month of January.

The slowdown in consumer price growth may generate optimism about the outlook for interest rates, as Fed officials have said they need greater confidence is slowing before they consider cutting rates.

A separate report released by the Labor Department showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended February 24th may also lead to interest rate optimism.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of February. The Chicago business barometer is expected to rise to 48.0 in February after slipping to 46.0 in January, although a reading below 50 would still indicate contraction.

The National Association of Realtors is also due to release its report on pending home sales in the month of January. Pending home sales are expected to increase by 1.0 percent in January after spiking by 8.3 percent in December.

Stocks regained ground after an early move to the downside on Wednesday but still ended the day mostly lower. The major averages all finished the day in negative territory following the mixed performance on Tuesday, with the Dow closing lower for the third consecutive session.

After falling by more than 200 points in early trading, the Dow ended the day down just 23.39 points or 0.1 percent at 38,949.02. The S&P 500 dipped 8.42 points or 0.2 percent to 5,069.76, while the Nasdaq slid 87.56 points or 0.6 percent at 15,947.74.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index edged down by 0.1 percent and 0.2 percent, respectively, while China’s Shanghai Composite Index surged by 1.9 percent.

Meanwhile, European stocks have moved mostly higher on the day. The U.K.’s FTSE 100 Index and the German DAX Index are both up by 0.5 percent, although the French CAC 40 Index is roughly flat.

In commodities trading, crude oil futures are rising $0.31 to $78.85 a barrel after falling $0.33 to $78.54 a barrel on Wednesday. Meanwhile, after edging down $1.40 to $2,042.70 an ounce in the previous session, gold futures are inching up $5 to $2,047.70 an ounce.

On the currency front, the U.S. dollar is trading at 149.78 yen versus the 150.69 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0834 compared to yesterday’s $1.0838.

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