U.S. stock futures were mostly higher on Tuesday as Wall Street digested cooler-than-expected inflation data and awaited an update on consumer prices. Futures tied to the S&P 500 (ES=F) rose 0.6%, while futures tied to the tech-heavy Nasdaq (NQ=F) rose 0.9%. Dow Jones Industrial Average (YM=F) futures rose 0.3%.
U.S. producer prices, which typically provide a proxy for consumer price trends, rose just 0.1% on the month in July, below economists’ expectations. On a year-over-year basis, the producer price index rose 2.2%, roughly in line with the Federal Reserve’s 2% inflation target.
The PPI release is a welcome prelude to Wednesday’s consumer price reading, which is due to be followed by July retail sales, a leading indicator of U.S. consumer health, on Thursday.
Wall Street is coming off an unusually dull day after more than a week of volatility. The S&P 500 and Nasdaq on Monday continued to slowly recover to the highs they hit before a three-day selloff erased much of the gains they had made since the start of the year.
Home Depot (HD) was the headline name on Tuesday’s earnings calendar. Shares of the home improvement company fell after it lowered its forecast for comparable-store sales for the rest of the year.
Elsewhere in individual stock markets, Starbucks (SBUX) stock surged more than 14% after a shock announcement that its CEO would be replaced by Chipotle CEO Brian Niccol. Chipotle (CMG) shares fell about 8%.
Meanwhile, Nvidia (NVDA) gained more than 3.5% in premarket trading, building on a 4% gain on Monday, with analysts at Bank of America calling it the “best recovery stock.”
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Morning chart courtesy of Bank of America
The August Bank of America Fund Manager Survey is out, and it's clear that investors are concerned about the growth outlook.
The chart below shows a sharp downgrade in global growth expectations, which came after a steady stream of negative economic surprises this month (mostly in the US).
Growth expectations are declining. (Bank of America)
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