Sign in Subscribe
Inflation (Economics)

US Equity Futures Edge Higher as Investors Await Key June Inflation Reading

Strategic Insights

— 2 min read

US equity futures edged higher on Wednesday, ahead of a key inflation reading, as investors weigh the prospect of faster rate hikes and potential recession. The expected June inflation reading, set for 8:30 am Eastern time, will provide crucial insight into the health of the US economy, with the Consumer Price Index (CPI) forecast to rise 1.1% on a monthly basis. An easing of core consumer prices, which have fallen for two consecutive months, could trigger a pullback, while a retreat in headline inflation could cement the case for faster rate hikes.

Key Takeaways:

  • The expected June inflation reading is set for 8:30 am Eastern time, with a forecasted 1.1% monthly increase in headline CPI and 0.6% rise in core CPI.
  • An easing of core consumer prices could trigger a pullback, while a retreat in headline inflation could cement the case for faster rate hikes.
  • The US economy's recession status remains uncertain, with the labor market strength and a slowdown in inflation prospects potentially compelling the Fed to pause its rate hike cycle later in the autumn.
  • The start of the second quarter earnings season is imminent, with June quarter updates from major banks like JPMorgan, Citigroup, and Wells Fargo expected before the end of the week.
  • Collective S&P 500 earnings are forecast to rise 5.8% from last year over the second quarter, to a share-weighted $465.3 billion, with energy and industrials pacing the anticipated gains.
  • The bond market continues to flash recession warnings, with the steepest inversion of the yield curve since 2007 and the weakest demand for a 10-year note auction in more than two years.
  • Twitter shares moved higher in pre-market trading after suing billionaire Elon Musk for failing to complete his $44 billion takeover, while Delta Air Lines fell 1.9% after posting softer-than-expected second quarter earnings.
  • Global oil prices steadied in overnight trading, while domestic gas prices extended their longest streak of declines since the pandemic.

Statistics:

  • US gas prices have fallen for around 27 consecutive days, the longest streak of declines since 2020.
  • US gas prices are around 47.2% higher than the same period last year.
  • The dollar index is trading at 107.932, near its highest levels in 20 years.
  • Europe's Stoxx 600 is marked 0.74% lower by mid-day trading in Frankfurt.
  • Asia's MSCI ex-Japan index fell 0.47%.

Sources:

  • Stocks Edge Higher, Inflation, Twitter, Gas Prices And Delta Earnings In Focus - Five Things To Know (https://www.thestreet.com/markets/-5-things-you-must-know-before-market-opens-weneday-071322)
  • Earnings Preview: Stocks Need Profit Boost to Defy Recession Bets (https://www.thestreet.com/markets/earnings-preview-stocks-need-profit-boost-to-defy-recession-bets)
  • 10-Year Auction Has Weakest Demand Since 2020 Amid Inflation Fears (https://www.thestreet.com/markets/10-year-auction-has-weakest-demand-since-2020-amid-inflation-fears)
  • Twitter Sues Elon Musk for Bailing on $44 Billion Takeover Deal (https://www.thestreet.com/markets/twitter-sues-elon-musk-for-bailing-on-44-billion-takeover-deal)

Read more