Quiet Economic Day May Lead To Choppy Trading On Wall Street
13 Março 2024 - 10:22AM
IH Market News
The major U.S. index futures are currently pointing to a roughly
flat open on Wednesday, with stocks likely to show a lack of
direction following the substantial rebound seen in the previous
session.
A lack of major U.S. economic data may keep some traders on the
sidelines ahead of the release of several key reports in the coming
days.
On Thursday, the Labor Department is scheduled to release its
report on producer price inflation in the month of February, which
may shed additional light on the outlook for interest rates.
Producer prices are expected to rise by 0.3 percent in February,
matching the increase seen in January, while the annual rate of
producer price growth is expected to accelerate to 1.1 percent from
0 .9 percent.
Reports on weekly jobless claims and retail sales are also due
to be released on Thursday, with retail sales expected to rebound
in February after slumping in January.
On Friday, trading may be impacted by reaction to reports on
import and export prices, industrial production and consumer
sentiment.
The University of Michigan’s preliminary report on consumer
sentiment in March may be in focus, as it includes reading on
inflation expectations.
After moving mostly lower in Friday and Monday’s sessions,
stocks showed a strong move back to the upside during trading on
Tuesday. The major averages fluctuated over the course of the
session but finished the day firmly in positive territory.
The tech-heavy Nasdaq helped lead the way higher on the day,
surging 246.36 points or 1.5 percent to 16,265.63. The S&P 500
also jumped 57.33 points or 1.1 percent to a new record closing
high of 5,175.27, while the narrower Dow climbed 235.83 points or
0.6 percent to 39,005.49.
The strength on Wall Street partly reflected a positive reaction
to the Labor Department’s highly anticipated report on consumer
price inflation in the month of February.
The Labor Department said its consumer price index climbed by
0.4 percent in February after rising by 0.3 percent in January. The
increase matched economist estimates.
Excluding food and energy prices, core consumer prices also rose
by 0.4 percent in February, matching the increase seen in January.
Economists had expected core prices to rise by 0.3 percent.
The report also said the annual rate of consumer price growth
ticked up to 3.2 percent in February from 3.1 percent in January.
The year-over-year growth was expected to be unchanged.
Meanwhile, the annual rate of core consumer price growth slowed
to 3.8 percent in February from 3.9 percent in January. Economists
had expected the pace of growth to decelerate to 3.7 percent.
While core price growth slowed by slightly less than expected,
the slowdown still seems to have added to optimism about the
Federal Reserve lowering interest rates in June.
“Although inflation has continued to ease, much of core
inflation remains ‘sticky’ and isn’t unwinding at a pace that would
offer the Fed the confidence it needs to begin the easing cycle
perhaps even in June,” said Quincy Krosby, Chief Global Strategist
for LPL Financial.
She added, “What could help underpin a move in June or July,
however, is that Owners Equivalent Rent (OER) has begun to tick
lower, and given its heavy weighting in the CPI a continued
downward trajectory by June or July could certainly assuage Fed
concerns regarding inflation remaining stubbornly higher.”
Software stocks saw substantial strength on the day, resulting
in a 2.6 percent surge by the Dow Jones U.S. Software Index.
Oracle (NYSE:ORCL) led the sector higher, soaring by 11.8
percent after reporting better than expected fiscal third quarter
earnings and strong cloud revenue growth.
Semiconductor stocks also showed a significant move back to the
upside, driving the Philadelphia Semiconductor Index up by 2.1
percent.
Considerable strength was also visible among retail stocks, as
reflected by the 1.5 percent gain posted by the Dow Jones U.S.
Retail Index.
On the other hand, gold stocks moved sharply lower along with
the price of the precious metal, dragging the NYSE Arca Gold Bugs
Index down by 2.0 percent.
Oracle (NYSE:ORCL)
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