Futures on stocks remained largely unchanged. Tuesday morning, following the release of the January consumer price index report, which revealed slightly faster-than-expected inflation of 6.4% annually.
The Dow Jones Industrial Average futures increased 28 points, or 0.08%. NASDAQ 500 futures
grew by 0.04%, while Nasdaq-100 futures moved down by 0.09%. Following the inflation news, Treasury yields were similarly basically unchanged.
The consumer price index increased 0.5% during the month, translating to a 6.4% increase annually. According to a study by Dow Jones, economists had predicted that the value of goods and services would increase by 0.4% on the month and 6.2% on the year. Additionally, the December report was updated to reflect a modest increase rather than a fall.
JPMorgan’s trading desk estimated that an annual hike of 6.4% to 6.5% would result in an S&P 500 loss of roughly 1.5% on Tuesday before the amount was made public. Stock futures are currently handling the number without issue. The result was better than JPMorgan’s worst-case scenario of a 6.5% or higher annual increase, an acceleration of inflation that would have resulted in a 2.5% loss in the S&P 500.
Overall, the data was better than anticipated, but it is unlikely to convince the Fed to abandon its tightening drive.
The path to lower inflation won’t probably be easy to take, according to LPL Financial’s Jeffery Roach, who stated this in a note on Tuesday. The Federal Reserve will not base its decisions solely on One report, but it’s obvious that the chances that inflation won’t slow down quickly enough to the Fed’s satisfaction are growing.
All three major indexes ended Monday’s session with gains of more than 1%, giving stocks a boost. From the previous week, when the Nasdaq Composite and S&P 500 recorded their worst weekly performances since December, that represented a change.
Investors will also be keeping an eye on Restaurant Brands International and Airbnb results in addition to the CPI in order to gain information about consumer health. Coca-Cola shares increased after the company reported fourth-quarter sales that above Wall Street forecasts.
Source (CNBC)
