Futures Pricing Point Higher: Investors Await Inflation Data

Futures Pricing Point Higher: Investors Await Inflation Data

U.S. stock futures pricing showed a positive start on Friday as investors eagerly awaited the release of the latest data on personal consumption expenditures, the Federal Reserve’s favoured gauge of inflation. Dow Jones Industrial Average futures gained 57 points, signalling a 0.2% increase, while S&P 500 futures ticked higher by 0.3% and Nasdaq 100 futures advanced 0.5%.

Despite the overall optimism in the market, shares of Nike took a hit, declining more than 3% after the apparel giant reported a weaker-than-expected quarterly profit. This news added a note of caution to an otherwise positive trading session.

Assessing Performance: Indices Standings for June, Second Quarter, and First Half

Friday is a significant day for investors as it signifies the conclusion of June and wraps up both the second quarter and the first half of the year. Let’s take a look at how the major indices stand as of Thursday’s close:

In June, the S&P 500 gained 5.18%, on track for its best monthly performance since January. The Nasdaq has also advanced 5.07%, and both indices are heading for a fourth consecutive positive month. The Dow has climbed 3.69%, poised for its best month since November.

In Q2, the S&P 500 has risen 6.99%, set to achieve a third straight quarter of gains. The Nasdaq boasts an impressive gain of 11.2%, marking back-to-back positive quarters. The Dow has experienced a 2.55% surge, maintaining its course towards achieving a third consecutive quarter of positive performance.

Furthermore, all three major averages are on track for a winning week, with the S&P 500 and Dow up over 1% each and the Nasdaq looking to close the week with a 0.7% increase.

Eurodollar Futures Pricings: Focus on Key Economic Data and the Fed’s Stance

Stephanie Lang, chief investment officer at Homrich Berg, emphasized the delicate balance between strong economic data indicating a soft landing and the Federal Reserve’s tightening stance. Lang noted that the Fed’s priority remains inflation control, and while the economic data has been robust, the central bank aims to tighten monetary policy enough to alleviate inflationary pressures.

Lang expects the Fed to continue with rate hikes, projecting two more increases depending on the tightness of the labour market and the persistence of inflationary pressures.

U.S. Treasury Yields Rise Ahead of Inflation Report

Investors’ attention is centred on the release of May core personal consumption expenditures (PCE) data, scheduled for 8:30 a.m. ET on Friday. Economists polled by Dow Jones expect the weekend futures index to show a 0.3% increase, slightly lower than the 0.4% rise in April. On an annual basis, the gauge is expected to have grown by 4.7%, the same rate as the previous month.

In anticipation of the personal consumption expenditure price index release, U.S. Treasury yields climbed on Friday. The 10-year Treasury yield rose over three basis points to 3.8858%, while the 2-year Treasury yield increased by more than four basis points to 4.9268%. The movement in yields indicates that investors are closely monitoring the inflation report as it could impact the Federal Reserve’s future interest rate policy decisions.