US Futures Rise Higher, Stocks Up Prior to CPI Data: Markets wrap

(Bloomberg – Wall Street futures rose and European stocks rose, as traders awaited the release of a report later in the day that could indicate that US inflation is cooling. This may reduce pressure on the Federal Reserve to increase rates.

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S&P 500 contracts were up 0.3%. Those on the Nasdaq 100 gained 0.2% after the technology sector, one of the most-beaten down groups during the Fed’s tightening campaign, led gains among US shares on Wednesday. American Airlines Group Inc. surged in premarket trading following its unexpected profit.

The benchmark European equities Index advanced 0.7%. This was boosted by second-day gains for real estate stocks amid expectations of a more favorable outlook for rates.

Treasuries steadied, following gains in Wednesday’s session, while a gauge of dollar strength slipped as investors looked beyond the drumbeat of hawkish comments from Federal Reserve officials. According to a report by the Bank of Japan, the yen rose on the news that it will investigate the side effects of its loose monetary policy.

Every aspect of Thursday’s CPI report will be scrutinized, with extra attention on core inflation, which excludes food and energy and is seen as a better indicator than the headline measure. The projected 5.7% increase would be well above the Fed’s goal, helping explain its intention of keeping rates higher for longer. The year-overyear price growth would be moderate.

“Core inflation remains well above target,” said Ronald Temple, chief market strategist at Lazard Ltd. “Having been late to act, the Fed is unlikely to pause the tightening cycle until inflation is definitively under control.”

In Asia, an index of the region’s shares climbed for a ninth time in 10 days as it headed for the highest level in about five months.

Elsewhere in markets, oil rose for a sixth day on hopes US inflation is cooling and as China’s crude buying ramps up before the Lunar New Year holidays. The data showed gold rising ahead of the data which could determine whether the two-month-old uptrend continues.

Bitcoin gained for a ninth day, the longest winning streak for the world’s largest crypto token since 2020.

This week’s key events:

  • US CPI, Initial Jobless Claims, Thursday

  • James Bullard, president of St Louis Fed, at the Wisconsin Bankers Association virtual meeting, Thursday

  • Thomas Barkin, President of Richmond Fed, speaks at VBA/VA Chamber on Thursday

  • China trade Friday

  • US University of Michigan Consumer Sentiment, Friday

  • Friday: Earnings Report by JPMorgan, Citigroup and Wells Fargo

This week’s MLIVE Pulse Survey:

Here are some of the major moves on markets:

Stocks

  • S&P 500 futures rose 0.3% as of 7:59 a.m. New York time

  • Nasdaq 100 futures rose 0.2%

  • Futures on Dow Jones Industrial Average rose 0.2%

  • Stoxx Europe 600 rose 0.7%

  • The MSCI World index rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index declined 0.2%

  • The euro was unchanged at $1.0763

  • The British Pound fell 0.1% to $1.2133

  • The Japanese yen rose 1.3% and reached 130.69 USD

Cryptocurrencies

  • Bitcoin rose by 4% to $18,267.03

  • Ether rose 4.2%, to $1,399.28

Bonds

  • The yield on 10-year Treasuries fell three basis points to 3.51 %

  • Germany’s 10-year yield declined five basis points to 2.15%

  • Britain’s 10-year yield declined eight basis points to 3.32%

Commodities

  • West Texas Intermediate crude oil rose 1.4%, to $78.51/barrel

  • Gold futures rose 0.6% and reached $1,890.10 an troy ounce

Bloomberg Automation provided assistance in producing this story.

With the assistance of Michael Msika and Brett Miller

Bloomberg Businessweek.

©2023 Bloomberg L.P.

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