Domestic stocks started the week little changed, but the futures are pointing to a positive open for the major indexes. In overnight trading, markets in Asia closed with solid gains, led by a 1% increase in Japan’s Nikkei Index. Meanwhile, stocks in Europe are mixed. Elsewhere, oil prices have edged lower, with West Texas Intermediate down about 0.2%, to around $86.25 a barrel.
With earnings season still a ways off, the focus this week will be on the Bureau of Labor Statistics’ latest report on inflation. Analysts on Wall Street are expecting the Consumer Price Index (CPI) for March to show a year-over-year increase of 3.4%, up slightly from the 12-month gain of 3.2% registered in February. Meanwhile, the “core” number, which excludes food and energy, is expected to come in around 3.7%, marking a slight decline from the 3.8% increase the month before.
That same day, the Federal Reserve will release the minutes from its last meeting. With inflation remaining well above the central bank’s target of 2%, investors and traders will be poring over the details for any insight as to the Fed’s thinking on monetary policy. Hopes for rate cuts have faded in recent months. At the start of the year, many market prognosticators were calling for as many as six quarter-point reductions to the overnight rate. As it stands, the Fed Funds Futures are pointing toward two cuts for the year, with the first most likely coming at the end of July.
On Thursday, we’ll get the Producer Price Index (PPI), which measures the change in price of goods sold by manufacturers. The consensus there is that the numbers will also be mixed, with the year-over-year figures showing an increase of around 2.3%, up from the 1.6% advance recorded in February. However, the 12-month reading for the core PPI is expected to only show an increase of 0.2%, down from 0.3% the month before.
On Thursday, the Department of Labor will announce initial jobless claims for last week, where the consensus is that the tally will tick lower, to around 217,000, versus 221,000 the week before.
Summing up Monday’s moves, the major indexes all closed less than one-tenth of a percentage point from the unchanged mark. The Dow Jones Industrials fell 11 points, or 0.03%, the S&P 500 moved down one point (0.04%), and the tech-laden NASDAQ rose five points (0.03%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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