U.S. Stocks May Lack Direction As Traders Digest Inflation Data
With traders digesting the highly anticipated consumer price inflation data, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures nearly unchanged.
The futures have fluctuated following the release of the inflation data, which largely came in line with economist estimates.
The Labor Department said its consumer price index edged down by 0.1 percent in December after inching up by 0.1 percent in November. Economists had expected consumer prices to come in unchanged.
The report also showed the annual rate of consumer price growth slowed to 6.5 percent in December from 7.1 percent in November, in line with expectations. The annual growth was the slowest since October 2021.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in December following a 0.2 percent uptick in November. The increase matched economist estimates.
The annual rate of core price growth slowed to 5.7 percent in December from 6.0 percent in November. The year-over-year growth was also in line with expectations.
While the slower price growth may encourage the Federal Reserve to continue scaling back the pace of interest rate hikes, traders may feel the slowdown was priced into the markets with the upward trend seen in recent sessions.
The Labor Department also released a separate report showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended January 7th.
The report said initial jobless claims slipped to 205,000, a decrease of 1,000 from the previous week’s revised level of 206,000.
The dip surprised economists, who had expected jobless claims to rise to 215,000 from the 204,000 originally reported for the previous week.
With the modest decrease, initial jobless claims fell to their lowest level since hitting 190,000 in the week ended September 24th.
Stocks showed a strong move to the upside over the course of the trading session on Wednesday, extending the upward move seen on Tuesday. With the continued advance, the major averages reached their best closing levels in almost a month.
The major averages saw further upside going into the close, ending the day at their highs of the session. The Dow climbed 268.91 points or 0.8 percent to 33,973.01, the Nasdaq surged 189.04 points or 1.8 percent to 10,931.67 and the S&P 500 jumped 50.36 points or 1.3 percent to 3,696.61.
In overseas trading, most stock markets across the Asia-Pacific region moved modestly higher during trading on Thursday. Japan’s Nikkei 225 Index closed just above the unchanged line, while China’s Shanghai Composite Index inched up by 0.1 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index is up by 0.3 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.5 percent.
In commodities trading, crude oil futures are jumping $1.29 to $78.70 a barrel after surging $2.29 to $77.41 barrel on Wednesday. Meanwhile, after inching up $2.40 to $1,878.90 an ounce in the previous session, gold futures are climbing $14.70 to $1,893.60 an ounce.
On the currency front, the U.S. dollar is trading at 130.25 yen versus the 132.45 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0768 compared to yesterday’s $1.0757.
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