Dow Futures Rise Ahead of Key Inflation Reading, As Stocks Head to Late May on a Winning Note

US stock indices were posted higher on Friday morning, the last trading session of the week and month. A number of updates on the health of the US economy were expected, including a report on the Fed’s preferred measure of inflation, which is expected to be released at 8:30 a.m. EST.

U.S. financial markets will be closed on Monday respecting the Memorial Day holiday and the bond market will close one hour earlier at 2 p.m. Friday’s volumes are expected to be low as a result.

How are stock indices traded?
  • Futures for the Dow Jones Industrial Average YMM21,
    + 0.42%

    + 0.42%
    rose 161 points to 34,598, a gain of 0.5%

  • Futures on the S&P 500 ES00 index,
    + 0.29%

    + 0.29%
    advanced 15.25 points, or 0.4%, to 4,214.

  • Nasdaq-100 NQM21 futures,
    + 0.25%

    + 0.25%
    increased by 47 points, or 0.3%, to 13,712.50.

Thursday, the Dow DJIA,
+ 0.41%
closed up 141.59 points, or 0.41%, at 34,464.64; the S&P 500 SPX index,
+ 0.12%
finished up 4.89 points or 0.12% to 4,200.88; the Nasdaq Composite slipped 1.72 points or 0.01% to 13,736.28. The Russell 2000 RUT Small Cap Index,
+ 1.06%
closed up 1.1%, or 23.80 points, to reach 2273.07.

Weekly and monthly statistics

At Thursday’s close, the Dow Jones was on track for a weekly gain of 0.7% and on track for a monthly rise of 1.7%, marking its fourth consecutive monthly gain. The S&P 500 is up 1.1% on the week so far and is aiming for a 0.5% gain in May, also marking its fourth consecutive monthly advance. The Nasdaq was pegged for a weekly gain of around 2% but a decline of 1.6% since the month. The Russell was heading for a weekly return of 2.6% and a monthly gain of 0.3%, which would mark its eighth consecutive monthly gain and longest winning streak since 1995.

What drives stock trading?

U.S. equity market investors are hoping to end the week and head into June on solid ground near all-time highs, but Wall Street needs to sort out the Federal Reserve’s preferred measure of inflation, the Consumer Expenditure Index first. personal.

Economists polled by Dow Jones predict that the core PCE price index rose 0.6% in April from the previous month and 2.9% in the previous 12 months.

The Wall Street Journal wrote that consumer spending likely rose 0.5% in April, according to consensus estimates from economists interviewed by the newspaper.

The personal income and spending report is also expected to show a decline in household income, but should also point out that Americans saved some $ 2 trillion during the pandemic, which saw many families receiving stimulus checks from the government. of $ 1400.

Fed policymakers are increasingly debating when to cut back easy money measures implemented during the worst of the coronavirus pandemic, especially after an April job creation report s turned out weaker than expected and that consumer price index readings have warmed, suggesting the economy is overheating.

Dallas Fed Chairman Robert Kaplan in an interview on CNBC Thursday said he was ready to start talking about the Fed’s $ 120 billion a month cut in asset purchases, citing the excess housing market as one of the reasons for the accommodation decline .

“At this point, as opposed to a year ago, these mortgage purchases, for example, could have unintended consequences and side effects, which I think we need to weigh against their effectiveness,” he said. he told the commercial network, reiterating the previous comments he had made.

“I think it would be wise as soon as possible to start taking your foot off the accelerator slowly, so that we can avoid and reduce the likelihood of having to apply the brakes on the road,” he said. declared.

Meanwhile, investors are also watching the details of a $ 6 trillion budget proposal for fiscal 2022 that is expected to be released later Friday by President Biden’s administration, which could further support the economic rebound. but is also being watched for an increase in debt issuance. Details of Biden’s budget plan due at 2 p.m.

In addition to PCE data, investors will look for an international trade report expected at the same time, a reading of Chicago area manufacturing activity, Chicago PMIs, is expected at 9.45 a.m., and a reading of consumer sentiment. is due at 10:00 a.m.

Which companies are targeted?
  • Dow component actions Salesforce Inc. CRM,
    were up after the enterprise software company reported better-than-expected first quarter results Thursday night.

  • HP Inc.the HPQ stock,
    was the focus after the company reported better-than-expected second quarter financial results.
  • Meme actions have been the center of attention lately, with actions by AMC Entertainment
    + 35.58%,
    up more than 119% so far this week and those of video game retailers GameStop Corp.
    + 4.77%
    increased by around 44% over the period.

How are the other assets doing?
  • The yield on the 10-year TMUBMUSD10Y T-bill was approximately 1.61%. Bond yields and prices move in opposite directions.

  • The ICE US Dollar DXY Index, a measure of the currency against a basket of six big rivals, fell 0.2%.

  • Oil futures traded higher, with the U.S. benchmark CL00 up 36 cents, or 0.5%, to $ 67.21 a barrel on the New York Mercantile Exchange, after hitting the highest first month contract settlement since October 29, 2018, according to Dow Jones Market Data.

  • GC00 gold futures were down $ 2.90, or 0.2%, to $ 1,895.50 an ounce, but were heading for a strong weekly gain.

  • The Stoxx Europe 600 SXXP index traded up 0.5%, while London’s FTSE 100 UKX rose 0.3%.

  • The Shanghai Composite SHCOMP finished 0.2% lower, while the Hong Kong Hang Seng HSI Index edged up 0.1%. Japan’s Nikkei 225 NIK gained 2.1%.

About Mary Moser

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