Stock futures traded slightly higher on Wednesday evening to extend gains from a previous positive session, with the recovery of the top three indices due to strong selling pressure earlier this month.
S&P 500 contracts increased as the session began overnight. Dow and Nasdaq futures also won.
Traders expect a set of key economic data on Thursday, which will demonstrate the solidity the consumer endured as the latest wave of coronavirus spread across the United States. monthly spending is falling, with sales likely to fall 0.7% a month after a 1.1% drop in July, according to Bloomberg data.
“We look forward to another smooth retail report [Thursday], for August, but to put the figures in context, the control measure (which generates the non-durable goods component of total consumer spending) is likely to continue to operate at around 6% above its level. January / February, “Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics, wrote in a note Wednesday.
He added that moderating monthly data after the nearly 9% jump in monthly sales in March was “inevitable,” as people had passed their last round of authorized stimulus checks under the plan’s law. American rescue.
“The correction has probably been amplified by the impact of the Delta variant, which also has a depressed expenditure, but it is impossible to separate these two effects with confidence,” Shepherdson said.
The latest data will also serve as another indicator of the relative strength of economic activity after an initial rebound in reopening in late spring and summer. While many economists have agreed that the general trend is to slow growth, the real extent of the slowdown remains to be seen.
This uncertainty has also allowed equity investors to closely monitor incoming data for signs of how the economic backdrop could affect the earnings picture of major companies. Amid concerns including the Delta variant, constant supply chain constraints, labor shortages and a potential pivot of Federal Reserve policy, the S&P 500 has so far fallen 0.9 % in September.
“Equity markets have been positive for seven consecutive months, which is pretty weird … So yes, investors are properly concerned,” Akshata Bailkeri, a Bruderman Asset Management equity analyst at Yahoo Finance, said. “But the reason we see it is because these profits behind many of these companies continue to grow, and that’s really what drives these index values up.”
As FactSet noted in its latest weekly report, consensus analysts are still looking for S&P 500 earnings growth of nearly 28% for the third quarter. Although there would be a slowdown in the growth rate of more than 80% in the second quarter of this year, this would remain the third highest year-on-year increase in the index’s profits since 2010. The season is set third quarter results report to be collected next month.
“I don’t think the statistics or the time they spend is a good reason [for a market correction]. In general, you need some kind of negative catalyst, “Randy Frederick, Charles Schwab, general manager of commercial derivatives, told Yahoo Finance. “What we have right now is not negative catalysts, but the lack of positive catalysts.”
“I think what has caused some of this more recent volatility is that we’ve had several Wall Street companies that have lowered estimates of companies’ GDP and profits, ”he added. “These are just forecasts; they may not be correct. Undoubtedly, the results of earnings in the last two quarters have substantially exceeded the expectations bar.”
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Wednesday at 6:10 pm ET: Stock futures open higher
These were the main movements in the markets from Wednesday evening:
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Futures S&P 500 (ES = F): +4 points (+ 0.09%) to 4,485.75
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Dow futures (YM = F): +23 points (+ 0.07%) to 34,842.00
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Nasdaq Futures (NQ = F): +9.25 points (+ 0.06%) to 15,413.25
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Emily McCormick is a Yahoo Finance reporter. Follow her on Twitter: @emily_mcck