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U.S. Index Futures Indecisive Ahead of Banking Earnings, Oil Prices Surge

Fernanda T
Latest News
April 12 2024 7:07AM

U.S. index futures show no clear direction in pre-market trading this Friday as investors eagerly await the financial results of major banking corporations.

At 6:18 AM, Dow Jones futures (DOWI:DJI) rose 21 points, or 0.05%. S&P 500 futures fell 0.16%, and Nasdaq-100 futures lost 0.35%. The yield on 10-year Treasury bonds stood at 4.54%.

In the commodities market, West Texas Intermediate crude oil for May rose 1.32% to $86.14 per barrel. Brent crude oil for June rose 1.13%, nearing $90.75 per barrel. Iron ore traded on the Dalian exchange rose 3.12% to $116.56 per metric ton.

The economic schedule for Friday begins at 8:30 AM with the release of the Department of Labor’s import and export price numbers for March. Subsequently, at 10 AM, attention will turn to the April consumer sentiment index, a joint preliminary reading from the University of Michigan and Thomson Reuters.

European markets are showing gains today as investors assess recent economic data from the UK and consider bleak projections for inflation in the United States. The UK’s Gross Domestic Product (GDP) grew by 0.1% in February, confirming expectations and signaling continued moderate economic growth for this year. Meanwhile, the European Central Bank decided to keep interest rates unchanged last Thursday, marking the fifth consecutive session without changes and signaling more definitively the possibility of a rate cut soon, even amid uncertainties about future actions by the Federal Reserve.

Asian markets closed mostly in negative territory, influenced mainly by unfavorable performance in Hong Kong. The Hang Seng Index experienced a significant drop of 2.18%, closing at 16,721.69 points, reacting to discouraging Chinese trade balance data. The numbers, released with a delay, revealed a surprising 7.5% decline in Chinese exports in March, contrary to expectations of a slight increase of 0.1%. Imports also fell short of forecasts, contributing to cautious sentiment among investors. Meanwhile, other Asian indices such as the Shanghai SE in China, Kospi in South Korea, and Australia’s ASX 200 also recorded losses, while Japan’s Nikkei showed a slight increase of 0.21%.

The closing of the US market on Thursday marked a day of recovery, especially for technology stocks, leading Wall Street to a strong upward movement. The highlight was the Nasdaq, which reached a new record closing high of 16,442.18 points, even after retreating from its highs during the day. The Dow Jones performed steadily, with a slight decrease of 0.01%, while the S&P 500 experienced an increase of 0.74%.

The positive market movement coincided with the results of a thirty-year Treasury bond auction, which, despite revealing average demand, seemed to influence investor sentiment. This auction was of particular interest given the attention to Treasury yields, which retreated from their highs after the announcement. Additionally, the day was marked by the analysis of inflation data with the Producer Price Index report.

In March, the Producer Price Index for final demand in the United States recorded a moderate increase of 0.2%, following a stronger advance of 0.6% in February, aligning with market projections. Notably, the annual inflation rate for producer prices accelerated significantly, reaching 2.1% in March, a considerable jump from the 1.6% recorded in February. This annual increase is the most significant since the peak of 2.3% observed in April of the previous year, indicating an upward trend in producer-level inflation, albeit slightly below economists’ expectations of 2.2%.

On the quarterly results front, before trading begins, financial giants such as Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), BlackRock (NYSE:BLK), the holding State Street (NYSE:STT), and insurer Progressive (NYSE:PGR) are scheduled to present reports.