U.S. Futures Steady Ahead of Key Inflation Data: Markets Wrap

U.S. Futures Steady Ahead of Key Inflation Data: Markets Wrap
Robert Brand
·3 min read

(Bloomberg) -- U.S futures were steady on Tuesday as the second-quarter earnings season got under way and traders awaited key American inflation data. Treasuries edged higher along with the dollar.

Contracts on the S&P 500 were little changed, while those on the Nasdaq 100 advanced. PepsiCo Inc. gained in pre-market trading after posting the fastest sales growth in at least a decade, while JPMorgan Chase & Co. and Goldman Sachs Group Inc. reported mixed results, with trading revenue slipping at both lenders though dealmaking bolstered their bottom lines. Boeing dropped in the pre-market after it cut its target for 787 Dreamliner deliveries.

The Stoxx Europe 600 index struggled for traction as health care stocks declined, with Gerresheimer AG slumping as much as 8% after reporting narrowing profit margins. Nokia OYJ headed an advance for telecommunications companies after saying it will raise full-year guidance. Banks declined after the European Central Bank said it would take steps to prevent excessive dividends when lifts a cap on payouts.

Expectations for a solid earnings season are supporting the stock rally, as investors ponder how central banks will unwind the support driving the recovery from the pandemic. Still, inflationary pressures remain a concern amid speculation around when the Federal Reserve will start cutting back stimulus. The data Tuesday may give an indication of whether the price spike has peaked.

“The broad markets are settling back and awaiting U.S. inflation,” said Sebastien Galy, a senior macro strategist at Nordea Investment Funds SA, in a note to clients. “We view the environment as one of gestation as earnings come in, before the risk-taking trend starts again, though a higher U.S. inflation print could create a temporary setback.”

Elsewhere, an MSCI gauge of the Asian stocks rose for a second day. Hong Kong outperformed as Chinese technology shares climbed after government approval of a Tencent Holdings Ltd. deal eased concerns about stricter regulation. Strong trade data from China also buoyed the mood.

Oil rose for the third time in four days as traders grappled with the demand implications of a Covid-19 resurgence in several regions and slowing economic growth in China.

For more market commentary, follow the MLIV blog.

Here are some events to watch this week:

Bank of America, BlackRock, Citigroup, Morgan Stanley are among firms starting the U.S. earnings seasonThe Reserve Bank of New Zealand’s latest interest rate policy WednesdayBank of Korea monetary decision ThursdayChina second-quarter GDP, key economic indicators ThursdayFederal Reserve Chair Jerome Powell appears before the Senate Banking Committee to deliver the semi-annual Monetary Policy Report to Congress ThursdayBank of Japan interest rate decision Friday

These are some of the main moves in financial markets:

Stocks

Futures on the S&P 500 were unchanged as of 8:05 a.m. New York timeFutures on the Nasdaq 100 rose 0.3%Futures on the Dow Jones Industrial Average were little changedThe Stoxx Europe 600 was little changedThe MSCI World index was little changed

Currencies

The Bloomberg Dollar Spot Index was little changedThe euro fell 0.2% to $1.1843The British pound fell 0.2% to $1.3850The Japanese yen rose 0.1% to 110.22 per dollar

Bonds

The yield on 10-year Treasuries declined one basis point to 1.35%Germany’s 10-year yield was little changed at -0.30%Britain’s 10-year yield declined two basis points to 0.63%

Commodities

West Texas Intermediate crude rose 0.3% to $74.35 a barrelGold futures rose 0.2% to $1,809.30 an ounce

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