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Stock index futures traded in the green on Tuesday, as traders await key wholesale inflation data.
S&P 500 futures (SPX) +0.5%, Nasdaq 100 futures (US100:IND) +0.5% and Dow futures (INDU) +0.2%.
The 10-year Treasury yield (US10Y) rose 1 basis point to 3.93%. The 2-year yield (US2Y) was flat at 4.04%.
Major market averages ended Monday’s session in a mixed fashion as traders wait to hear about further inflation data that is slated to be released later in the week.
“The past 24 hours more closely resembled quiet summer trading than what we had seen earlier this August,” Deutsche Bank’s Peter Sidorov said.
This week has important inflation reports slated to come, with the July producer price index scheduled to come before the bell on Tuesday and retail inflation expected to land tomorrow.
“Producer prices better represent corporate pricing power than consumer prices. This means the real fed funds rate is around 3% for companies — an unnecessarily restrictive rate,” UBS’ Paul Donovan said.
The PPI is expected to come up 0.2% on a monthly basis, and 2.3% year-on-year. Core PPI is anticipated at 2.7% annually, also up 0.2% on a monthly basis.
“July PPI data likely to reverse June’s jump in retailers’ gross margins; a profit squeeze lies ahead,” Pantheon Macroeconomics said.
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