U.S. stock futures flat following a surge

by Jonathan Adams
U.S. stock

Contracts on the Dow inched higher after the index posted its best single-session gain since March, while Contracts on the S&P 500 and Nasdaq were little changed after advancing strongly earlier

Stock futures opened little changed Thursday evening after a surge during the regular trading day, which saw the major U.S. equity indexes recover some losses after three straight days of declines

Contracts on the Dow inched higher after the index posted its best single-session gain since March. Contracts on the S&P 500 and Nasdaq were little changed after advancing strongly earlier.

Shares of Disney dropped after the company posted quarterly revenue that missed estimates, with subscribers to Disney+ falling short of Wall Street’s expectations and the firm’s theme parks division losing money for a fourth straight quarter.

Coinbase shares were little changed even after the crypto exchange’s first results as a newly public company missed expectations.

Home rental company Airbnb topped first-quarter sales estimates but posted a wider-than-expected quarterly loss, sending shares slightly lower in late trading.

Investors this week especially have been nervously eyeing signs of inflation in the economic recovery coming out of the Covid-19 pandemic. Both consumer and producer prices surged in April over last year, reflecting both an inevitable bounce off last year’s virus-depressed levels, as well as upward price pressures as demand across supply chains outstripped supply.

Consumer prices soared by a faster than expected 4.2% year-over-year (YOY) last month, government data showed earlier this week. And producer prices also came in higher than expected, with core producer prices increasing 4.1% last month versus the expected rise of 3.8%.

However, signs that fewer workers were leaving the job market at least temporarily helped assuage market participants’ concerns over labour supply shortages on Thursday. New weekly jobless claims dropped to a pandemic-era low last week, dropping below 500,000 for the first time since March 2020.

A new print on retail sales from the Commerce Department on Friday is set to give the latest update on consumer demand, with easing stay-in-place orders likely helping drive an ongoing rebound in service-sector spending.

However, consensus economists are looking to see that retail sales slowed to a just 1% increase in April, down from the 9.8% reported during the previous month, with some pay-back occurring after stimulus checks boosted March’s spending.

Altogether, investors are weighing whether the strength of the post-COVID economic recovery will in fact spur an overheating of the economy – and if that becomes the case, when the Federal Reserve will ultimately choose to step in.

I think the big problem for investors right now is the Fed isn’t going to change its course any time soon. But a lot of people who do have inflation fears longer-term are going to look for a shift in monetary policy that won’t take place, George Ball, Sanders Morris Harris CEO, told Yahoo Finance on Thursday.

He said: And so while people wait and wait and wait, those fears will become greater. And I think ultimately they tug prices down, although not yet. We of the investing class like to see prices going higher, and there is momentum still in the market that is still on the bull side, at least temporarily, than on the downside.



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