U.S. stock futures remained relatively unchanged on Monday night, reflecting cautiousness among traders who are eagerly awaiting key inflation data. Dow Jones Industrial Average futures saw a small increase of 4 points, or 0.01%, while the S&P 500 futures gained 0.02%, and the Nasdaq-100 futures saw a slight uptick of 0.04%.
Investors are coming off a positive session for the major averages, with the Dow Jones Industrial Average climbing 209.52 points, or 0.62%, and the S&P 500 advancing 0.24%. The Nasdaq Composite lagged behind slightly, rising only 0.18%.
However, market participants are now turning their attention to the upcoming release of the June consumer price index (CPI) report on Wednesday, as well as the June producer price index (PPI) on Thursday. These reports will provide insights into whether the decline in inflation has continued, and will set the stage for the future direction of interest rates. While investors have anticipated another quarter-point increase at the Federal Reserve’s July 26 meeting, they are uncertain about the central bank’s plans for its September meeting. Last week’s strong jobs data raised concerns that policymakers may revert to raising rates after the pause in June.
Dan Greenhaus, Chief Strategist at Solus Alternative Asset Management, highlighted the significance of the central bank’s decision. He stated, One more hike or two more hikes is much less important than when, ultimately, they begin to cut rates on the other side of this. That’s much more consequential for, I think, the risk landscape than one more hike or two more hikes.
In terms of economic updates, the NFIB Small Business Index for June will be released on Tuesday before the bell. Economists predict a reading of 90.0, slightly higher than May’s level of 89.4.
Looking ahead to the second-quarter earnings season, investors can expect results from notable financial institutions such as JPMorgan Chase, Wells Fargo, and Citigroup, as well as companies like BlackRock, PepsiCo, and Delta Air. UnitedHealth, a Dow component, will report its earnings on Friday.
Meanwhile, WD-40 Company experienced a 4.7% increase in extended trading following the release of its fiscal third-quarter results. The company reported $141.7 million in total net sales, indicating a 15% year-on-year growth. CEO Steve Brass expressed his satisfaction, stating, I am happy to share with you that after two quarters of flat-to-down sales, we have returned to solid top-line growth in the third fiscal quarter.
Barclays, an investment bank, has raised its 2023 price target on the S&P 500 to 4,150 from its previous estimate of 3,725. Analyst Venu Krishna stated that while they expect equities to remain range-bound throughout the year, they do not see the Tech-centric rally expanding to the rest of the S&P. However, Krishna noted that Big Tech and Rest of Tech could experience a retracement in the near term due to concerns about the low breadth of the rally.
Barclays has also increased its 2023 full-year earnings estimate to $218 from $200.
In conclusion, U.S. stock futures showed minimal movement on Monday night as traders awaited crucial inflation data. The upcoming release of the CPI and PPI reports will determine the trajectory of interest rates, and investors remain uncertain about the Federal Reserve’s plans for its September meeting. Additionally, the NFIB Small Business Index for June is set to be released, and the second-quarter earnings season is on the horizon. Furthermore, WD-40 Company reported solid growth in its fiscal third quarter, while Barclays raised its S&P 500 price target and full-year earnings estimate for 2023.
