US Stock Futures Steady as Investors Eye Key Economic Data; European Stocks Rally
Wall Street Awaits Economic Indicators, Fed's Next Move
Investing.com -- US stock futures were mostly flat on Friday morning as market participants anticipated a series of crucial economic reports, including new consumer spending figures and the Federal Reserve's preferred inflation gauge.
By 06:31 ET (10:31 GMT), the Dow Jones Industrial Average futures were largely unchanged. The S&P 500 futures dipped slightly by 5 points or 0.1%, and the Nasdaq 100 futures declined by 43 points or 0.2%.
The benchmark S&P 500 marked its third consecutive record close on Thursday, adding 23 points or 0.4%. This climb was supported by lower-than-expected weekly jobless claims and a final reading of the US gross domestic product (GDP) confirming a 3% expansion in the second quarter.
These figures bolstered optimism that both the economy and the labor market remain robust, setting the stage for the Fed to proceed with its policy easing cycle after last week's significant interest rate cut.
Key Economic Indicators on the Horizon
Investors are keenly awaiting new data on personal spending and inflation, which could offer insights into the US economy's condition as the Federal Reserve considers further rate cuts later this year.
Personal spending, which makes up more than two-thirds of economic activity, is expected to have grown by 0.3% in August, down from 0.5% in July.
Meanwhile, economists predict that the personal consumption expenditures (PCE) price index, the Fed's favored inflation measure, will rise by 0.2% month-over-month in August, maintaining July's pace. Year-over-year, the reading is expected to ease to 2.3% from 2.5%.
When excluding volatile items like food and fuel, the core PCE price index is projected to match July's month-on-month rate of 0.2% and slightly increase to 2.7% from 2.6% on an annualized basis.
European Markets Surge on China Stimulus Hopes
European stock markets hit new highs in mid-morning trading on Friday, buoyed by a rally in Asia led by China.
Reports of China considering additional stimulus measures, alongside recent support policies aimed at stabilizing its economy, propelled Chinese stocks to their best week since 2008.
Luxury stocks in Europe, heavily reliant on Chinese sales, also saw gains. Shares of high-end fashion companies like LVMH, Kering, Hermes, Hugo Boss, and Burberry advanced. The automobile sector also experienced an uplift.
Oil Market Shows Volatility Amid Supply Concerns
Oil prices edged higher on Friday as traders evaluated China's stimulus measures and the prospect of increased oil output from Libya and the OPEC+ alliance.
As of 06:47 ET, Brent crude futures rose by 0.3% to $71.30 per barrel, while US West Texas Intermediate (WTI) crude futures gained 0.4% to $67.94 per barrel.
In Libya, rival groups agreed to end a dispute over the central bank, potentially bringing back over 500,000 barrels per day (bpd) of supply. Additionally, OPEC+ is set to reverse 180,000 bpd of production cuts in December.
Investors are weighing the potential rise in supply against the backdrop of a significant stimulus package from China, which could impact the world's largest oil importer.
Analysis: What This Means for You
To put it simply, the financial markets are in a holding pattern as investors await crucial economic data that could influence future Federal Reserve actions. Here's how it could affect you:
- Stock Market Stability: The muted movement in US stock futures suggests that the market is in a "wait-and-see" mode. If the upcoming economic data is favorable, we could see a continuation of the stock market's upward trend. Conversely, disappointing data may lead to volatility.
- Economic Health Indicators: Personal spending and PCE data will provide insights into consumer behavior and inflation trends. Strong spending figures and controlled inflation could signal a robust economy, which is generally positive for investments.
- Global Market Influence: European stocks are climbing, driven by China's potential stimulus measures. If you have international investments, particularly in luxury goods or automotive sectors, this could be beneficial.
- Oil Prices and Supply: Fluctuations in oil prices impact everything from gas prices to the cost of goods. The balance between increased supply and China's demand will be crucial. Higher oil prices can lead to higher expenses, affecting your budget.
In summary, the data released today could shape the economic landscape in the coming months. Staying informed and understanding these indicators can help you make better financial decisions, whether you're investing in stocks, monitoring inflation, or keeping an eye on global markets.