Stock market today: Wall Street uneven ahead of US inflation update as US earnings season kicks off
Trading is uneven on Wall Street as the corporate earnings season kicks off and ahead of new inflation data for the Federal Reserve to consider before its next policy meeting later this month.
Futures for the Dow Jones Industrial Average ticked up 0.1% before the bell, while S&P 500 were essentially unchanged.
U.S. consumer prices for June are due out on Wednesday, with forecasts calling for an annual increase of just over 3% compared with 4% the month before. The Federal Reserve has been raising interest rates in an effort to cool the economy and bring inflation down to its target level of 2%.
On Thursday, the government reports on prices at the wholesale level.
Sprinkled throughout the week will be new quarterly earnings reports from Delta Air Lines, PepsiCo and big banks like Wells Fargo, JPMorgan and Citigroup.
On Friday, Wall Street drifted to a mixed finish after data suggested the U.S. job market is still warm enough to keep the economy growing but maybe not so hot that it stokes inflation much higher. U.S. employers added 209,000 jobs last month, a slowdown from May’s hiring of 306,000.
Wage growth held steady last month, instead of slowing as economists expected, for example. While workers would rather have the reported 4.4% gain in average hourly earnings from a year earlier than the 4.2% that was predicted, Wall Street’s fear is the Fed will see too-strong wage growth as keeping upward pressure on inflation.
“Job growth is slowing. Not at all surprising following the massive layoffs happening across the country,” Clifford Bennett of ACY Securities said in a commentary. “In a nutshell, while jobs growth is slowing it is not enough to make the Fed happy by a big margin.”
A lot is riding on whether the economy can navigate the narrow pathway to avoid a long-predicted recession. It needs to keep growing despite much higher interest rates instituted by the Federal Reserve to bring down inflation.
As expected, U.S. Treasury Secretary Janet Yellen wrapped up a fence-mending visit to Beijing on Sunday with no major agreements or breakthroughs in strained ties. But Yellen said relations were on a “surer footing,” and the two sides would continue to talk despite disputes over many issues including access to advanced technologies, Chinese territorial ambitions and allegations of human rights abuses.
In Europe at midday, Germany’s DAX gained 0.6%, while the CAC 40 in Paris rose 0.7%. Britain’s FTSE 100 moved 0.4% higher.
China reported Monday that producer prices fell 5.4% in June from a year earlier, down from a 4.6% drop in May, as growth in the U.S. and Europe continued to taper off under a barrage of interest rate hikes meant to snuff out high inflation. Consumer price inflation was flat, also suggesting weakening of demand as activity in the world’s second largest economy slows.
China’s economy has slowed faster than hoped for after an initial surge in growth as the country bounced back from disruptions from the COVID-19 pandemic.
“The releases of the latest indicators from China did little to quell concerns about the lethargic state of economic activity,” Tim Waterer of KCM Trade said in a report. .He added that “with deflationary troubles brewing for the world’s second largest economy, one wonders how long it will be before the central bank steps in to provide something more meaningful on the stimulus side.”
Weak data tends to lead Chinese investors to anticipate such market support. Hong Kong’s Hang Seng gained 0.6% to 18,479.72 and the Shanghai Composite index edged 0.2% higher to 3,203.70.
Tokyo’s Nikkei 225 slipped 0.6% to 32,189.73, while the Kospi in Seoul shed 0.2% to 2,520.70. Australia’s S&P/ASX 200 declined 0.5% to 7,004.00.
India’s Sensex edged 0.1% higher, while the SET in Bangkok advanced 0.3%.
In other trading Monday, U.S. benchmark crude oil fell 48 cents to $73.38 per barrel in electronic trading on the New York Mercantile Exchange. It added $2.06 to $73.86 per barrel on Friday.
Brent crude, the pricing basis for international trading, gave up 42 cents to $78.05 per barrel.
The U.S. dollar ticked down to 142.14 Japanese yen from 142.17 yen. The euro slipped to $1.0960 from $1.0967.
On Friday, the S&P 500 lost 0.3% while the Dow gave up 0.6%. The Nasdaq composite edged 0.1% lower and the Russell 2000 index of smaller stocks rose 1.2%.
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Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.