Stock Futures Slightly Lower as Investors Eye Earnings Season and Inflation Data

　　

On Thursday, Stock futures are trading slightly lower as investors keep an eye on the start of corporate earnings season and the latest inflation data. The focus is on what the inflation numbers suggest about the economy and how they may impact interest rates. Dow Industrial Average futures have lost 42 points, while S&P 500 futures are slightly below the flatline, and Nasdaq-100 futures have shed 0.1%.

The March producer price index, which measures the prices paid by companies, declined by 0.5% from the previous month, even though economists had expected prices to remain the same. This decline has supported a trend of easing inflation seen in the March consumer price index report. Investors will also pay close attention to data on retail sales, import prices, and the industrial sector, which will provide more insights into the state of the economy.

Investors will keep a close eye on today’s big-bank earnings, with JPMorgan, Wells Fargo, and Citi set to report before the bell. In addition, they will monitor data on retail sales, import prices, and the industrial sector, which will provide additional insight into how the economy is doing.

On Thursday, all sectors experienced gains in the stock market, with the Communication Services and Consumer Discretionary sectors leading the way with a 2.33% and 2.31% increase respectively. The Real Estate sector was the only one that saw a decline with a decrease of 0.41%. The utility sector had the smallest increase of 0.02%.

This data shows that the overall stock market experienced positive growth on this particular day, with the majority of sectors seeing increases in stock prices. The strong performance of the Communication Services and Consumer Discretionary sectors could suggest positive news for companies in those areas, while the decrease in the Real Estate sector may indicate some struggles for companies in that industry.

Major Pair Movement

The EUR/USD currency pair reached a 1-year high as investors believe the US Federal Reserve may only raise interest rates by 25 basis points once more before beginning a series of rate cuts later in the year. This follows a fall in US PPI in March, which was greater than anticipated. While the data points to a cooling economy, it does not suggest enough weakness for the Federal Reserve to abandon its focus on inflation just yet.

Markets forecasted that a series of aggressive rate hikes and tighter bank credit, combined with a shrinking pool of savings due to the pandemic, may lead to economic weakness later in 2023 and 2024. Despite reports suggesting a 25bp hike in May by ECB policymakers, markets still project a 41% chance of a 50bp increase and a total of 78bp of tightening by October. Sterling rose 0.3% after hitting new 10-month highs, and the Aussie surged 1.4% amid risk-on flows, strong jobs data, and positive China growth prospects.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
USD	Core Retail Sales (Mar)	20:30	-0.40%
USD	Retail Sales (Mar)	20:30	-0.40%
USD	Prelim UoM Consumer Sentiment	22:00	62.0