U.S. equity futures powered higher Thursday, while the dollar eased and Treasury yields fell, as investors appeared to shrug-off accelerating inflation signals, as well as a hawkish Federal Reserve, ahead of a busy slate of bank and bluechip earnings.
A record-high reading for factory gate inflation in China September, which followed surprisingly solid export data the previous day, suggests price pressure will ripple through the global supply chain over the coming months.
Alongside yesterday's faster-than-expected reading for September inflation in the United States, which returned to a 13-year high, and minutes detailing the Fed's aim of tapering the pace of its $120 billion in monthly bond purchases later this year, and investors now how a much-clearer picture of both the macroeconomic backdrop and the central bank's likely reaction.
Minutes of the Fed's September meeting, published yesterday, noted that FOMC members "generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate."
Still, with a series of big ticket earnings expected hitting the tape before the start of trading Thursday -- including Dow components UnitedHealth Group (UNH Get UnitedHealth Group Incorporated Report and Walgreens Boots (WBA Get Walgreens Boots Alliance Inc Report, as well as Citigroup (C Get Citigroup Inc. Report, Morgan Stanley (MS Get Morgan Stanley (MS) Report and Wells Fargo (WFC Get Wells Fargo & Company Report -- and a key reading of September retail sales slated for tomorrow, stocks are looking at a solid start to the Thursday session.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 270 point opening bell gain ahead while the broader S&P 500 is priced for a 35 point move to the upside. Nasdaq Composite futures, meanwhile, are set for a 130 point gain as benchmark 10-year note yields eased to 1.528% in overnight trading and Apple (AAPL Get Apple Inc. (AAPL) Report posts a 0.8% rebound in pre-market trading.
Walgreens Boots Alliance shares were up 2.4% in pre-market after it posted stronger-than-expected fourth quarter earnings as pharmacy and retail sales gains boosted the Dow component's bottom line.
Wells Fargo shares gained 1.1% in pre-market trading after the troubled lender posted third-quarter earnings that beat analysts forecasts amid broader improvement in the economy and net reserves.
Bank of America jumped 2.9% after it posted stronger-than-expected third quarter earnings Thursday as net interest income and improving loan growth put the lender in a solid position heading into the final months of the year.
UnitedHealth shares were also on the move, rising 2.2% after its adjusted third-quarter earnings beat analysts’ forecasts and the group raised its full-year outlook amid strong membership growth and lower negative Covid-19 after-affects on its operating costs.
Away from equities, global oil prices moved back towards the highest levels in seven years Thursday, adding to inflationary pressures in major economies around the world, as the International Energy Agency warned that power crises in Europe and Asia would boost crude demand through the end of the year.
"Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming," the Paris-based group said in its monthly energy market report.
WTI futures for November delivery $1.10 higher from last night's close to start the session at $81.54 per barrel ahead of Energy Department stockpile data at 10:30 am Eastern time, while Brent contracts for December, the global pricing benchmark, were up $1.12 at $84.28 per barrel.
