Nasdaq, S&P 500 Futures Signal Uncertainty Before Crucial Inflation Data While Bitcoin Rallies On: Why This Analyst Models Solid Gains This Year

The cautious sentiment prevailing throughout the week persisted on Thursday, with U.S. stock futures indicating a mostly lower open as traders anxiously await the Federal Reserve’s favored inflation gauge. If the reading proves milder than anticipated, pent-up demand from sidelined traders could propel stocks sharply higher, but a hotter-than-expected inflation figure may trigger further selling. Rising bond yields and a firmer dollar reflect apprehensions about the inflation data.

Market participants will also hear from numerous Fed officials before the “blackout” period begins on March 9. While tech earnings have generally impressed, there have been some disappointments from other sectors. The ongoing crypto rally underscores the prevailing risk-on sentiment.

Cues From Last Trading Session

Wednesday’s session saw U.S. stocks close lower as investors digested revised fourth-quarter GDP data and its inflation components. All major indices opened lower and remained below the unchanged line throughout the session, closing in negative territory.

Recent weakness has pulled the S&P 500 and Dow Industrials off their record highs, with the latter declining for three consecutive sessions. Small-cap stocks reversed course and underperformed larger counterparts, with the Russell 2000 Index ending down 0.77%.

Communication services, IT, and healthcare sectors bore the brunt of the downturn, while real estate stocks surged.

Fund manager Louis Navellier said, “We’re seeing primarily a minor tech correction, with the Magnificent 7 the weakest, the pullback on the sectors which have had the strongest YTD performance, a rational move.”

An analyst shrugged off the current lackluster phase and pointed to data that offers hope for the remainder of the year. Carson Group’s Ryan Detrick shared a chart that showed in the fourth year of a new president, the market performed well in the second half of the year. The average gain for these years is 12.2%, the chart showed.

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY slipped 0.27% to $504.90 and the Invesco QQQ ETF QQQ fell 0.20% to $434.40, according to Benzinga Pro data.

Upcoming Economic Data:

The Labor Department is due to release its customary weekly jobless claims report at 8:30 a.m. ET. Economists, on average, expect the number of individuals claiming unemployment benefits to rise from 201,000 in the week ended Feb. 17 to 209,000 in the week ended Feb. 24.

The Bureau of Economic Analysis is due to release its personal income and spending report for January at 8:30 a.m. On a month-over-month basis, personal income and spending may have increased by 0.4% and 0.2%, respectively. This compares to increases of 0.3% and 0.7%, respectively, in the previous month. The core price consumption expenditure index – the Fed’s preferred gauge, may have risen 0.4% on a monthly basis and 2.8% on an annual basis. In December, the monthly and annual rates came in at 0.2% and 2.9%, respectively.

ISM Chicago’s regional manufacturing survey results, which are due by 9:45 a.m. ET, is expected to show a slower contraction in February. The Chicago business barometer may have risen 2.1 points from January to 48.1. A reading below 50 suggests a contraction in activity.

The National Association of Realtors will release its pending home sales index for January at 10 a.m. ET. The headline is expected to show a 1.4% month-over-month increase, slower than the 8.3% climb in December.

Among the Fed speeches scheduled for the day are:

• Fed Governor Christopher Waller: 10:15 a.m. ET
• Atlanta Fed President Raphael Bostic: 10:50 a.m. ET
• Chicago Fed President Austan Goolsbe: 11:00 a.m. ET
• Cleveland Fed President Loretta Mester: 1:15 a.m. ET & 3:30 p.m. ET

See Also: How To Trade Futures

Stocks In Focus:

• AMC Entertainment Holdings, Inc. AMC fell about 8.50% in premarket trading following the company’s earnings announcement.
• AI-levered mid-cap c3.ai, Inc. AI rose over 15.50%, also in reaction to its quarterly results.
• Other stocks moving on earnings reports are Monster Beverages Corp. MNST (up over 4%), Marathon Digital Holdings, Inc. MARA (down over 7%), Nutanix, Inc. NTNX (up over 4%), HP, Inc. HPQ (down about 3.5%), DoubleVerify Holdings, Inc. DV (down over 17%), Okta, Inc. OKTA (up over 24%) and Snowflake, Inc. SNOW (down nearly 23%).
• Anheuser-Busch InBev SA/NV BUD, Best Buy Co., Inc. BBY, Celsius Holdings, Inc. CELH, Hormel Foods Corporation HRL, NetEase, Inc. NTES and Papa John’s International, Inc. PZZA are among the notable companies reporting quarterly results ahead of the market open.
• Those reporting after the close include Autodesk, Inc. ADSK, Cooper Companies, Inc. COO, Fisker, Inc. FSR, Zscaler, Inc. ZS, Hewlett Packard Enterprises Company HPE, NetApp, Inc. NTAP and SoundHound AI, Inc. SOUND.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures edged down 0.01% to $78.53 in early European session on Thursday after the commodity snapped a two-session winning run and ended down 0.42% on Wednesday. The benchmark 10-year Treasury note climbed 0.041 percentage points at 4.315%.

In Asia, the Chinese market rallied strongly while the mood elsewhere showed nervousness, especially as traders awaited key U.S. inflation data. European stocks were firmed in early trading on Thursday. The crypto rally continued with Bitcoin BTC/USD topping $62,500.

Ahead of the U.S. PCE data, the dollar was firmer against most major currencies, except the euro and the yen.

Read Next: Gold Bull Peter Schiff Warns US Q4 Growth Is Really ‘A Credit Bubble’ Amid $834B Surge In National Debt

Image made via AI on MidJourney