Stock futures rise as traders look ahead to November wholesale inflation report
Stock futures rose slightly Friday as investors looked ahead to new inflation data. The upcoming report on the US producer prices will be one of the final pieces of data to inform a rate decision by the Federal Reserve next week.
Friday’s US producer price index for November will offer a progress report on how effective the Fed’s campaign to quell inflation has been. The PPI in October cooled more than expected. And there are some signs the labor market has tempered, with continuing jobless claims climbing to the highest since early February.
Investors are taking heart from any signs of softness in prices that may allow policymakers around the world to be less hawkish and more supportive of growth.
At the same time, Fed officials are leery of fanning stock rallies that ease financial conditions too much and thwart their inflation-fighting mission. Strategists have lined up to warn investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy.
Economists expect slight increase in producer price index
Economists expect that wholesale prices ticked up slightly in November, in-line with the pace of the previous month.
The consensus for November’s producer price index, due Friday, is a seasonally-adjusted 0.2% increase on a monthly basis, according to FactSet data. On the year, economists surveyed by FactSet expect a 7.2% increase.
In October, the index rose 0.2% on the month, less than anticipated. It also notched an 8% yearly gain, according to data from the Bureau of Labor Statistics.
Shares of DocuSign are soaring in after-hours trading on rosy earnings.
The tech company stock jumped as much as 16% after it beat expectations on the top and bottom lines for the latest quarter, reporting adjusted earnings of 57 cents per share on $645 million in revenue where Wall Street expected adjusted earnings of 42 cents and revenue of $627 million, according to Refinitiv.
Contracts on the S&P 500 added 0.4% after the underlying benchmark notched its first advance this month. A European equity benchmark swung to a gain, paring its weekly loss to 1.2%. Asian equities headed for their sixth weekly gain, the longest such stretch in two years.
Even with Thursday’s gains, all three major averages are on track to post losses for the week. The S&P 500 is off by 2.6% for the week, while the Nasdaq is down more than 3%. The Dow shed 1.8%.
Treasury yields were little changed, with the 10-year rate just below 3.5%. A gauge of the dollar erased slipped.
“Central banks will rather be on the safe side when it comes to future inflation after having underestimated inflationary pressures last year,” Karsten Junius, chief economist at Bank J. Safra Sarasin Ltd., wrote in a note to clients, adding that a pause in rate hikes is some way off.
Key events this week:
US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday