U.S. stock futures remain red with earnings, big data dump
Main U.S. equity index futures red: Nasdaq 100 down ~0.7%
Sep PCE price index MM, YY in-line with estimates
Euro STOXX 600 index off ~0.9%
Dollar, gold dip; bitcoin off ~1%; crude up ~1.5%
U.S. 10-Year Treasury yield rises to ~4.30%
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U.S. STOCK FUTURES REMAIN RED WITH EARNINGS, BIG DATA DUMP
The main U.S. equity index futures are under pressure in the wake of the release of the latest Personal Consumption Expenditures (PCE) report as well as data on jobless claims.
E-mini S&P 500 futures EScv1 are down around 0.6% which is roughly flat with where they were just before the numbers were released. The futures were already trading down given premarket losses in Microsoft MSFT.O and Meta Platforms META.O as a result of their quarterly reports after the closing bell on Wednesday.
The September headline PCE number on a month-over-month basis and on a year-over-year basis both came in as expected. The core PCE index on a month-over-month basis and on a year-over-year basis were both hotter than the Reuters Poll numbers.
September personal income month-over-month was in-line with the estimate. September adjusted consumption was stronger than expected.
Initial jobless claims came in at 216k vs a 230k estimate, while Q3 employment costs came in less than expected:
According to the CME's FedWatch Tool, the probability that the Fed cuts rates by 25 basis points (bps) at its November 6-7 meeting at 95% is roughly unchanged from just before the data was released. The chance that the FOMC leaves rates unchanged is around 5%.
Looking out to the December 17-18 FOMC meeting, the FedWatch Tool is still showing a bias for rates to be in the 4.25%-4.50% area vs the current target rate is 4.75%-5.00%. Conviction in that bias has increased just slightly to 72% vs about 70% just before the data.
The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.30%. It was about 4.29% just before the numbers came out. The yield ended Wednesday at 4.264%.
A majority of S&P 500 sector SPDR ETFs are lower in premarket trade with tech XLK.P and materials XLB.P, both down about 1%, posting the biggest drops. Energy XLE.P is up around 0.4%.
The SPDR S&P regional banking ETF KRE.P is up around 0.2%.
Regarding the data, Brian Jacobsen chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:
"Real disposable personal income has four months in a row of 0.1% growth. Spending has grown, but it’s increasingly concentrated in non-discretionary areas like health care, prescription drugs, housing, and utilities."
Jacobsen added "I’d like to jump on the bandwagon that says the consumer is doing great, but the details don’t really support that. The headline numbers look good, but details matter to individuals."
October Chicago PMI is due at 0945 EDT (1345 GMT). The estimate is 47.0 vs the 46.6 prior release.
Here is a premarket snapshot from just shortly before 0900 EDT (1300 GMT):
(Terence Gabriel, Chuck Mikolajczak)
*****
FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
HIGHER GROWTH, HIGHER INFLATION: ECONOMIST VERDICT ON UK BUDGET - CLICK HERE
"FRANC-LY, MY DEAR..." TARIFFS WON'T MATTER - CLICK HERE
STOXX AT 7-WEEK LOWS - CLICK HERE
EUROPE BEFORE THE BELL: TECH DRAG AND BANK EARNINGS - CLICK HERE
CLOUDS GATHER OVER 'MAG 7' EARNINGS - CLICK HERE
LMData10312024 https://tmsnrt.rs/48yosQT
Premarket10312024 https://tmsnrt.rs/4fojhVP
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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