Stock index futures indicated a slightly positive opening Friday as investors await big banks’ results. JPMorgan (JPM), Wells Fargo (WFC), Citi (C) and BlackRock (BLK).
Dow futures (INDU) +0.2% were up and S&P (SPX) and Nasdaq 100 futures (NDX:IND) were trading slightly in the green. The major benchmarks closed higher for the fourth day as another key inflation data moderated.
“The main story was that monthly PPI came in at just +0.1%, and the previous month was revised down a tenth to -0.4%. So more positive news on the inflation side,” Deutsche Bank’s Jim Reid said. “In particular, it meant investors became increasingly confident that the next meeting would mark the final rate hike of the current cycle, despite the Fed’s signal in their recent dot plot for two more.”
“Easing US inflation remains the key theme of the week, and we’ll see more of that today as trade price data remains negative,” ING said. “At the same time, note that the market has also priced in a much higher terminal rate for Fed funds when you look out a few years. That’s in the sub-4% area, but not that far below the 4% mark. If you take this, and then look at the 10yr yield at 3.8%, there is no glaring value in the latter.”
Treasury yields rebound to reverse two-day slide as inflation eased. The 10-year Treasury yield (US10Y) was up 3 basis points to 3.79% and the 2-year yield (US2Y) rose 6 basis points 4.67%.
On an economic front, investors will look for June Import/Export prices, consumer sentiment and Baker-Hughes rig count.