By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Core consumer prices spike in April
U.S. stock futures headed south on Friday after a report showing
a spike in core consumer prices last month.
An increase in the inflation rate along with the improving labor
market may push the Federal Reserve to raise interest rates as soon
as June, even as recent remarks from officials as well as FOMC
minutes indicated that a June rate hike was unlikely.
Investors were also awaiting a speech from Federal Reserve
Chairwoman Janet Yellen ahead of a long holiday weekend.
Futures for the Dow Jones Industrial Average (YMM5) dropped 23
points to 18,231, while those for the S&P 500 index (ESM5)
slipped 4.5 points to 2,123. Futures for the Nasdaq-100 index
(NQM5) were off 5.5 points to 4,523.
Wall Street stocks closed slightly higher on Thursday
(http://www.marketwatch.com/story/us-stock-futures-squeezed-ahead-of-data-deluge-2015-05-21),
sending the S&P 500 (SPX) to a fresh record, but the big
indexes continued to trade in narrow ranges. Read more on
Thursday's action
(http://www.marketwatch.com/story/us-stock-futures-squeezed-ahead-of-data-deluge-2015-05-21)
(http://www.marketwatch.com/story/us-stock-futures-squeezed-ahead-of-data-deluge-2015-05-21)
(http://www.marketwatch.com/story/us-stock-futures-squeezed-ahead-of-data-deluge-2015-05-21)As
long as bond yields are moving sideways or lower, equity investors
are "happy putting money to work," said Chris Weston, chief market
strategist at IG, in a note. He added that the CBOE Volatility
index (VIX) is testing the year's lows around 12.11%, and is now
33% below the five-year average.
"It's no coincidence then that we are back to hearing the
repetitive calls of the S&P 500 making a new all-time high,"
said Weston.
Friday could remain a quiet day for Wall Street if many traders
take off early for the Memorial Day holiday, which will see markets
closed on Monday.
In economic news, U.S. consumer prices
(http://www.marketwatch.com/story/housing-healthcare-behind-strong-rise-in-core-inflation-in-april-2015-05-22)
rose a seasonally adjusted 0.1% in April, the Labor Department.
Energy prices slumped 1.3% last month while food prices were
unchanged. The core CPI, which excludes volatile food and energy
costs, jumped 0.3%, driven by another increase in housing expenses
and also a gain in medical care costs.
Fed chief Yellen will give a speech on the economic outlook to
the Greater Providence Chamber of Commerce at 1 p.m. Eastern. Read
a preview
(http://www.marketwatch.com/story/why-consumers-are-so-cautious-2015-05-19)
(http://www.marketwatch.com/story/why-consumers-are-so-cautious-2015-05-19)Stocks
to watch: Shares of Deere & Co.(DE) are up 1.7% in premarket
after financial results. Campbell Soup Co. (CPB) profit beat
expectations
(http://www.marketwatch.com/story/campbell-soup-profit-beats-views-while-sales-slip-2015-05-22),
but sales slipped.
Shares of Hewlett-Packard Co.(HPQ) edged up 0.9% premarket after
earnings squeezed past forecasts late Thursday, but the company
also provided a cautious outlook.
Marvell Technology Group Ltd. (MRVL) could see pressure. The
chip maker fell more than 2% late Thursday after saying its
financial chief will retire.
Other markets: European stocks were trading slightly lower,
while Asia stocks rose with the Shanghai Composite Index
(http://www.marketwatch.com/story/china-shares-hit-seven-year-high-2015-05-21)
marking its best performance since 2008.
Oil prices
(http://www.marketwatch.com/story/oil-holds-onto-recent-gains-wti-trades-above-60-a-barrel-2015-05-22)(CLN5)
slipped below $60 a barrel, falling more than 1%, while gold prices
(GCM5) gained. The dollar
(http://www.marketwatch.com/story/dollar-slips-against-yen-as-investors-await-boj-kuroda-remarks-2015-05-22)(DXY)
rose against the euro (EURUSD) and the yen (USDJPY) after the CPI
report.
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