US pre-open: Stocks seen up ahead of inflation gauges

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Sharecast News | 28 Jul, 2023

US stock futures pointed to a firmer open on Wall Street on Friday as investors eyed the latest inflation gauges.

At 1040 BST, Dow Jones Industrial Average futures were up 0.1%, while S&P 500 and Nasdaq futures were 0.3% and 0.6% higher, respectively.

Joshua Mahony, chief market analyst at Scope Markets, said: "Wall Street hopes to regain a more stable footing today, following a period of significant volatility driven by central bank and economic releases.

"Today sees the focus turn to US inflation picture, with the Fed’s favoured core PCE price index figure due out alongside personal spending. With the latest GDP and durable goods data highlighting an economy that appears to be in good health, a notable decline in this inflation gauge could further embolden the bulls.

"On the equity front, chipmaker Intel looks set for a strong end to the week, with earnings after the bell bringing a surprise Q2 profit as they beat on both EPS and revenues. Looking ahead, earnings from Exxon Mobil, Procter & Gamble, and Aon are likely to grab the headlines. Oil & gas stocks have been widely anticipated to suffer the greatest decline in earnings and revenues thanks to weaker underlying commodity prices. Nonetheless, outperformance from Chevron earlier in the week highlights the potential for these low-ball expectations to provide an opportunity for stocks in the energy sector."

Earlier, the BoJ maintained negative interest rates but said it would now allow "greater flexibility" in its target range for 10-year government bond yields.

The country's strict yield curve control policy would now allow movements of around plus and minus 0.5% without "rigid limits," the central bank said.

It also offered to buy 10-year bonds at 1% every business day through fixed-rate operations, expanding its tolerance by another 50 basis points. Yields for the bonds stood at 0.539%, their highest level since September 2014.

The BOJ said it will "conduct yield curve control with greater flexibility, regarding the upper and lower bounds the range as references, not as rigid limits, in its market operations".

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