U.S. stock futures are suggesting the major indexes will start today’s session slightly in the red. In overnight trading, markets in Asia closed mostly lower. Meanwhile, the major European indexes are just below the unchanged mark. Elsewhere, oil prices have edged higher, with West Texas Intermediate up 0.3%, to around $74.40 a barrel.
Stocks began the week on an up note, as investors appear encouraged by two reports last week that showed inflation is slowing. Specifically, the Consumer Price Index (CPI) inched ahead by just 0.2% in June, bringing the 12-month rate to 3.1%. This marked a substantial decrease from the peak of 9.1% a year earlier. Meanwhile, the Producer Price Index (PPI) showed a 0.1% increase for both last month and on an annualized basis. In March of last year, the annualized PPI peaked at 11.6%. Together, the declines suggested that the Federal Reserve’s battle to tame inflation may be approaching its final stages. However, central bank officials have indicated that the benchmark rate will likely increase by at least another 0.5% before the year is over. (The Federal Open Market Committee is scheduled to convene for its next rate decision on July 25th and 26th.)
Meanwhile, investors got the latest reading on the health of the economy with this morning’s release of the retail sales numbers for June. The Commerce Department reported that consumers remained somewhat resilient, with sales rising 0.2%, versus a 0.5% increase the month before (revised from 0.3% previously). June’s figures, however, were below consensus expectations, which were calling for a 0.5% uptick. A little later this morning we will also get the industrial production figures for last month, where the Street is calling for a flat reading, versus a 0.2% decline in May. Additionally, the home builder confidence index for July is due out today.
Wednesday brings the June totals for housing starts, with estimates calling for a dip to an annualized rate of 1.48 million units, compared to 1.63 million the month before. Also, building permits (a more forward indicating measure) are expected to come in around 1.48 million, down from 1.49 million in May. Lastly, existing home sales figures for last month are due Thursday morning, with the consensus is calling for a slight decline to an annualized 4.2 million units.
Summing up Monday’s price moves, the Dow Jones Industrials moved ahead 76 points, or 0.2%, the S&P 500 was up 17 points (0.4%), and the tech-heavy NASDAQ led the pack with a gain of 131 points (0.9%). - 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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