February 16, 2023

Dow Jones, S&P 500, Nasdaq set for mostly lower open as investors prepare for latest data dump

6.30am: PPI expected to ease

Wall Street is expected to open mostly lower as investors continue to digest news that reveals the US economy remains resilient, clearing the path for the Federal Reserve to continue hiking interest rates to rein in sticky inflation.

January’s Producer Price Index (PPI), scheduled for release before the start of trade, will be just the latest data point for zthe Federal Reserve to consider.

Futures for the Dow Jones Industrial Average (DJIA) fell 0.1% in Thursday pre-market trading and those for the broader S&P 500 index also declined 0.1%, while contracts for the Nasdaq-100 were flat.

The main indices all closed higher on Wednesday after retail sales numbers for January came in hotter than expected, following on from inflation data on Tuesday that was also higher than anticipated.

The DJIA closed 0.1% up at 34,128, the Nasdaq Composite jumped 0.9% to 12,071 and the S&P 500 added 0.3% to 4,148. The small-cap-focused Russell 2000 improved by 1.1% to 1,960.

“Investors continue to digest a busy data docket this week, with today’s producer price inflation, housing data, weekly jobless claims and the Philly Fed manufacturing survey the latest data dump,” commented TickMill Group market analyst Patrick Munnelly.

“PPI inflation is pencilled to retreat to 5.4% in the annualised comparison, while initial jobless claims are expected to remain anchored at record low levels, suggesting continued tightness in the US labour market landscape.

“Housing starts are set to buck the positive data trend, they are expected to post another decline with the sector weighed by interest rate increases, while the Philly Fed is expected to post a marginal improvement in conditions, but ultimately remaining in contractionary territory. Investors will also eye comments from Fed officials Bullard & Mester set to speak on the US economic outlook later today,” Munnelly added.

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