Wall Street saw modest gains before the bell Wednesday as investors await a pair of important economic reports and more corporate earnings results.
Futures for the Dow Jones industrials inched up 0.2% and futures for the S&P 500 rose 0.3%.
Wall Street will get another inflation update on Wednesday, when the government issues its December report on producer prices, which tracks prices before they are passed on to consumers. The government will also release retail sales data for December, which should give investors more insight into how inflation affected consumer spending during the all-important holiday season.
Consumer inflation has been easing for six straight months, raising hopes the Fed could soon consider softening its policy on interest rates, even though it has said it will keep raising rates this year and expects no rate cuts until 2024.
The year has gotten off to a solid start for Wall Street after a dismal 2022, but investor sentiment could quickly turn as more companies release results for the October-December quarter.
Analysts expect companies in the S&P 500 to report a drop in profits for the fourth quarter from a year earlier. That would mark the first such decline since 2020, when the pandemic was crushing the economy.
Among the companies reporting their latest results this week: Netflix, M&T Bank and Procter & Gamble.
Shares of Party City jumped more than 10% in premarket after the party supplies retailer filed for Chapter 11 bankruptcy protection as it struggles with rising prices and a pullback in customer spending.
The New Jersey company has secured a commitment from the Ad Hoc Group for $150 million in debtor-in-possession financing that would allow more than 800 company-owned and franchise stores throughout North America to remain open.
World shares were mixed Wednesday, with Tokyo gaining more than 2% after Japan’s central bank kept its lax monetary policy unchanged, dispelling speculation it would yield to pressure to tighten credit to counter rising inflation.
The Bank of Japan shook markets in December with a surprise widening of its target range for yields on long-term government bonds, part of its “yield curve control policy.” It kept that range in its latest policy statement, despite recent cases when yields on 10-year government bonds exceeded the 0.5% upward or downward daily limit.
With Wednesday’s decision, the BOJ’s key interest rate remains at minus 0.1%.
“In keeping its key rate and yield curve control policy unchanged at today’s meeting, the Bank of Japan probably wanted to convey a message to the market: don’t fight the BOJ,” economists at ING Economics said in a report.
Inflation has been more subdued in Japan than in the U.S. and many other countries, but prices have been creeping up as costs for oil and gas and other imports have risen. Moves by other central banks to raise interest rates to snuff out decades-high inflation have pulled the value of the Japanese yen lower, another strain on Tokyo’s monetary stance.
Core inflation in Japan, excluding volatile food and energy costs, is forecast to rise to 1.8% in the fiscal year ending in March, and wages have not risen much.
After the BOJ’s announcement, the dollar gained sharply against the Japanese yen, topping 131 yen but then retreating to 128.92 yen, up from 128.17 yen late Tuesday.
The Nikkei 225 in Tokyo gained 2.5% to 26,791.12. Australia’s S&P/ASX 200 edged 0.1% higher to 7,393.40, while the Hang Seng in Hong Kong rose 0.5% to 21,678.00. The Shanghai Composite index was virtually unchanged, at 3,224.41.
Bangkok’s SET gained 0.1% while the Sensex in Mumbai was up 0.6%.
In Europe at midday, Britain’s FTSE 100 ticked up 0.1%, Germany’s DAX rose 0.2% and the CAC 40 in Paris was up 0.3%.
In other trading, U.S. benchmark crude gained $1.62 to $81.80 per barrel in electronic trading on the New York Mercantile Exchange. It added 32 cents to $80.18 per barrel on Tuesday.
Brent crude, the pricing standard for international trading, was up $1.43 at $87.35 per barrel.
The euro rose to $1.0834 from $1.0790.
On Wall Street Tuesday, stock indexes closed mixed as investors focused on a busy week of corporate earnings for insight into how much damage inflation is inflicting on the economy.
The S&P 500 slipped 0.2%, ending a four-day winning streak. The Dow Jones Industrial Average fell 1.1%, while strength in technology stocks helped the Nasdaq composite eke out a 0.1% gain. The Russell 2000 index fell 0.1%.
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Kurtenbach reported from Bangkok; Ott reported from Washington.
