US stock futures gain momentum ahead of Jackson Hole meeting

US stock futures gain momentum ahead of Jackson Hole meeting

US stock futures rose on Thursday amid weak summer trading, with investors hoping for an update on the Fed’s thinking later in the week.

How are stock index futures trading
  • Futures S&P 500 ES00,
    +0.52%
    rose 37 points, or 0.9%, to 4,180

  • Dow Jones Industrial Average YM00 Futures,
    +0.27%
    added 225 points, or 0.7%, to 33183

  • Nasdaq 100 futures NQ00,
    +0.69%
    rose 136 points, or 1.1%, to 13,066

On Wednesday, the Dow Jones Industrial Average DJIA,
+0.18%
up 60 points, or 0.18%, to 32,969, the S&P 500 SPX,
+0.29%
up 12 points, or 0.29%, to 4141, and the Nasdaq Composite COMP,
+0.41%
gained 50 points, or 0.41%, to 12,432. The S&P 500 is up 12.9% from its mid-June low but remains down 13.1% year-to-date.

What is driving markets

S&P 500 futures rose in the early hours of Thursday, helped by signs that the world’s fourth-largest economy may be doing better than feared.

Futures started rallying after revised data showed Germany’s gross domestic product grew by 0.1% in the second quarter. Analysts were not forecasting growth due to fears that rising energy prices were dampening activity. The German Ifo business climate index also did not fall as much as expected.

Also helping the mood was news that Beijing was deploying another 1 trillion yuan ($146 billion) in measures to help revive an economy grappling with a severe housing slowdown, drought-related manufacturing slowdown and prolonged shutdowns. COVID-19.

However, movement in futures occurs in weak trading conditions. For example, the previous session on Wall Street saw just 8.8 billion shares traded on the various exchanges. That was the lowest so far this year and was 26% below the daily average in 2022, according to Dow Jones data.

Activity was also dampened by a reluctance among some investors to make bold bets before Federal Reserve Chairman Jay Powell delivered a speech Friday at the Jackson Hole symposium.

Investors will dissect Powell’s comments for clues about the direction of the Fed’s policy, an issue that has determined the market’s trajectory lately.

“Markets have maintained their hold pattern ahead of a few key days that should provide more near-term directional cues,” said Richard Hunter, head of markets at Interactive Investor.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that now the start of the Jackson Hole meeting has arrived, “the jitters that swept the indexes earlier in the week had been kept under control. The expectation that the US Federal Reserve will continue to raise rates to bring down inflation has already been priced in to some extent.”

Investors were also facing a decidedly mixed mix of gains from some former tech darlings that were released after Wednesday’s close. Nvidia NVDA stocks,
+0.24%
and Salesforce CRM,
+2.28%
were lower, but Snowflake SNOW,
+4.19%
up 17.3% after its numbers and predictions were well received.

The penchant of many companies to highlight economic uncertainty when releasing their earnings updates has colored the thinking of equity analysts and left some reluctant to see much more market upside for now.

“Our S&P 500 year-end target of 4,200 points reflects a balance between soft landing and recession scenarios,” Citi US equity strategist Scott Chronert said in a note.

“With several months ahead in the year, volatility related to market interpretation of macro macro and rate data points is to be expected,” added Chronert.

Thursday’s U.S. economic reports include initial weekly jobless claims and second-quarter GDP data, both due at 8:30 am ET. The GDP data will also include the preliminary reading of second-quarter corporate earnings.

How are the other assets?
  • Oil futures were flat on US CL.1 crude,
    -0.12%
    rose just 0.1% to $94.96 a barrel.

  • The TMUBMUSD10Y 10-year Treasury yield,
    3.082%
    dropped 2 basis points to 3.088%

  • The ICE Dollar DXY index,
    -0.26%
    fell 0.4% to 108.27, helping to inspire gains for GC00 gold,
    +0.78%,
    which rose 0.9% to $1,777 an ounce.

  • Bitcoin BTCUSD,
    -0.09%
    advanced 0.1% to $21,721.

  • Asian markets have received an additional boost from the latest stimulus in China. Hongkong Hang Seng HSI,
    +3.63%
    rose 3.6% and the Shanghai Composite SHCOMP,
    +0.97%
    rose 1%. In Europe, the Stoxx 600 SXXP,
    +0.12%
    rose 1%.

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