Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stock futures exhibited mixed trends on Friday following a negative close in the previous session. Notably, UnitedHealth Group, Inc. (NYSE:UNH) and JPMorgan Chase & Co. (NYSE:JPM) reported better-than-expected earnings. Investors are keeping an eye on a forthcoming consumer sentiment report, especially regarding its inflation expectations data.
Rising oil prices are causing some apprehension among traders, although energy stocks might benefit from the strength in commodities. On the global front, there’s a pessimistic outlook as China, known as the world’s manufacturing hub, continues to report weak economic data, sparking concerns about its overall economic well-being.
Cues From Thursday’s Trading:
In response to the September consumer price inflation report, which revealed slightly higher monthly and annual figures than anticipated, major stock indices traded in a rather lackluster manner on Thursday, hovering near the unchanged line through much of the morning session. However, selling pressures picked up during the afternoon, partly triggered by reports of a tepid response to the 30-year Treasury bond auction. Although the indices dipped to their daily lows during late afternoon trading, they managed to recover some losses but concluded the session with modest declines.
The Nasdaq Composite, the S&P 500, and the Dow Industrials concluded their four-day winning streak, retreating from their three-week high. Meanwhile, small-cap stocks experienced significant selling pressure on Thursday, with the Russell 2,000 Index now down approximately 1% for the year, in contrast to the S&P 500’s robust 13.3% gain.
The majority of S&P sector categories ended the session in the red. Nevertheless, energy and information technology stocks finished nearly flat, exhibiting a slight upward bias.
US Index Performance On Thursday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.63% | 13,574.22 |
| S&P 500 Index | -0.62% | 4,349.61 |
| Dow Industrials | -0.51% | 33,631.14 |
| Russell 2000 | -2.20% | 1,734.25 |
Analyst Color:
The Federal Reserve may have to cut the Fed funds rate in 2024 or risk a recession, said fund manager Louis Navellier. The FOMC minutes as well as the latest inflation data have served to take a Fed rate cut at its December FOMC meeting off the table for now, he said.
“We have a very uneven economy right now, and we’re going to have some sort of change next year because consumers are really upset about all the food, energy inflation, and of course high housing costs as well,” Navellier said.
The fund manager also sees another compelling factor that could force the Fed to relent. “I think the Fed will be cutting rates next year because they want to stay out of any political debate,” he said, adding, “They’re going to be a big target for politicians to blame for any economy’s problems.”
Futures Today
Futures Performance On Friday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.37% |
| S&P 500 | -0.11% |
| Dow | +0.07% |
| R2K | -0.24% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) slipped 0.09% to $433.28 and the Invesco QQQ ETF (NASDAQ:QQQ) moved down 0.37% to $368.56, according to Benzinga Pro data.
Upcoming Economic Data:
The Bureau of Labor Statistics is scheduled to release its export and import prices data for September at 8:30 a.m. EDT. Economists expect import prices to have risen 0.5% month-over-month, the same pace as in August. The export price growth, on the other hand, may have decelerated from 1.3% in August to 0.5% in September.
Philadelphia Fed President Patrick Harker, a member of the Federal Open Market Committee, is due to speak at 9 a.m. EDT.
The University of Michigan’s preliminary consumer sentiment index for October is expected at 10 a.m. EDT. The headline consumer sentiment index may have edged from 68.1 in September to 67.2 in October. The forward inflation expectations readings of the report may also evince interest among market participants.
See also: Best Futures Trading Software
Stocks In Focus:
- UnitedHealth rose about 2% in premarket trading after the healthcare services giant reported a third-quarter earnings beat and raised the low end of its full-year earnings guidance.
- Dollar General Corp. (NYSE:DG) rallied about 8% after it brought back its previous CEO Todd Vasos to helm the company. The company reduced the low end of its full-year earnings per share guidance.
- Shares of Activision Blizzard, Inc. (NASDAQ:ATVI) could be in focus as the U.K. antitrust regulator gave its nod for its pending acquisition by Microsoft Corp. (NASDAQ:MSFT).
- Citigroup, Inc. (NYSE:C), BlackRock, Inc. (NYSE:BLK), and PNC Financial Services Group, Inc. (NYSE:PNC) are among the other major companies reporting their earnings before the market opens.
Crude oil futures rallied 4.06% to $86.28 in early European session on Friday after the commodity ended nearly unchanged on Thursday. The spike came after the U.S. tightened its sanctions on Russian crude oil sales.
The benchmark 10-year Treasury note fell 0.009 percentage points to 4.621% on Friday.
The global markets were swathed in a blanket of red on Friday amid abounding headwinds. The major Asian markets fell across the board, taking cues from the negative performance of the U.S. market overnight. Some disappointing data points from China, including smaller-than-expected new loans and M2 money stocks and deflationary wholesale prices aggravated the weakness.
European stocks also declined and were moderately lower by late-morning trading, as higher crude oil prices stoked inflation fears.
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