Nasdaq, S&P 500 Futures Indicate Weak Opening For Wall Street: Retail Sales Data To Be In Focus

Zinger Key Points
  • Fed officials reiterated the central bank may have to keep on raising rates if price rises are sticky.
  • Investors and traders will be watching out for the release of the retail sales data for January on Wednesday.
  • Kraft Heinz, Roku, Twilio and Roblox are among some of the key earnings to be reported on Wednesday.

Stock futures indicate major Wall Street indices are expected to open lower on Wednesday, in continuation to Tuesday's fall, after inflation came in higher than expected.

Fed officials reiterated the central bank may have to keep on raising rates if price rises are sticky. Investors and traders will be watching out for the release of the retail sales data for January on Wednesday.

Cues From Tuesday's Trading:

On Tuesday, major Wall Street indices traded mixed after data showed inflation increased 0.5% in January, with an annual gain of 6.4%, against the consensus estimate of 6.2%.

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The rise in the number was led by higher food and gasoline prices as well as rents. Following the news, treasury yields had jumped with the yield on 5-year notes closing above the 5% mark for the first time since July 2007.

Index Performance Value
Nasdaq Composite + 0.57% 11,960.15
S&P 500 - 0.028% 4,136.13
Dow Jones - 0.46% 34,089.27

Analyst Color:

ANZ Research pointed out in a note that back-month fed fund futures sold off 22 bps as the market priced in a higher fed funds profile for this year and into 2024.

"Scheduled Fed speakers wasted no time in communicating that inflation is proving more persistent than they would like and that rates need to rise further," the note said.

Federal Reserve officials reportedly said on Tuesday the central bank will have to keep gradually raising interest rates to rein in inflation and suggested sticky price pressures led by a strong jobs market may push borrowing costs higher than they once anticipated.

New York Fed President John Williams told reporters in New York that there are risks inflation stays higher for longer than expected given the strength in the labor market, according to a Reuters report.

Futures Today:

Index Performance
Nasdaq Composite Futures -0.42%
S&P 500 Futures -0.32%
Dow Futures -0.21%
R2K Futures -0.84%

In pre-market trading, the SPDR S&P 500 ETF Trust SPY was down 0.34% at the time of writing while the Invesco QQQ Trust Series 1 QQQ fell 0.47%.

Upcoming Economic Data:

  • Market participants will be watching out for the release of the U.S. retail sales data, a foremost indicator of consumer spending that accounts for the majority of overall economic activity.
  • The Energy Information Administration is set to release its crude oil inventories.
  • The bond market will be eyeing the auction of the long-dated 20-year bonds.

Stocks In Focus:

  • Airbnb Inc ABNB shares rose 9.37% in pre-market trading. The company reported fourth-quarter revenue of $1.9 billion, up 24% year-over-year, according to Benzinga Pro data.
  • Tripadvisor Inc. TRIP shares gained 8.95% in pre-market trading. The company's fourth-quarter revenue increased 47% year-over-year to $354 million, which beat average analyst estimates of $343.91 million, according to Benzinga Pro.
  • OraSure Technologies, Inc. OSUR: Shares of the company rose 16.63% in pre-market trading. The company's net revenues for the fourth quarter stood at $123.1 million, registering a 94% increase from the fourth quarter of 2021.
  • Kraft Heinz Co KHC, Roku Inc ROKU, Twilio Inc TWLO and Roblox Corp RBLX are scheduled to announce their quarterly results on Wednesday.

Commodities, Bonds, Other Global Equity Markets:

  • Crude oil futures were trading lower on Wednesday. West Texas Intermediate futures belonging to the March expiry were trading 1.23% lower at $78.09/bbl while Brent Crude April futures were trading lower by 0.98% at $84.74/bbl.
  • Yield on the 10-year U.S. Treasury notes was up by 0.025 bps at 3.736%.
  • Asia-Pacific markets, except for India, closed lower.
  • European stocks traded mixed on Wednesday, with the German and French markets trading higher while the U.K. market traded marginally in the red. U.K. consumer inflation fell for the third month in a row in January to 10.1%.

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