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Stock futures traded slightly higher on Wednesday night to extend gains from a positive session earlier, with all three major indices recovering from strong selling pressure earlier this month.
S&P 500 contracts rose early in the overnight session. Dow and Nasdaq futures also rose.
Traders are eagerly awaiting a set of key economic data on Thursday, which will show how well the consumer has weathered the spread of the latest wave of coronavirus in the United States. monthly spending decline, with overall sales likely to fall 0.7% on the month after falling 1.1% in July, according to Bloomberg data.
“We expect another report on weak retail sales [Thursday], for August, but to put the numbers in context, the control measure – which generates the non-durable goods component of total consumer spending – is probably still around 6% above its January level / February, ”Ian Shepherdson, chief US Pantheon Macroeconomics economist, wrote in a note Wednesday.
He added that a moderation of the monthly data after the nearly 9% jump in monthly sales in March was “inevitable” given that people had passed their last round of stimulus checks authorized under American Rescue. Plan Act.
“The correction was likely amplified by the impact of the Delta variant, which also lowered expenses, but it’s impossible to separate those two effects with certainty,” Shepherdson said.
The latest data will also serve as another indicator of the relative strength of economic activity after a first wave of reopening in late spring and summer. While many economists have agreed that the general trend is for growth to decelerate, the true extent of the deceleration remains to be seen.
This uncertainty has also prompted equity investors to closely monitor incoming data for signals on how the economic environment could impact large company earnings. Amid concerns such as the Delta variant, lingering supply chain constraints, labor shortages and a possible Federal Reserve policy pivot, the S&P 500 has so far fallen by 0, 9% in September.
“The stock markets have been positive for seven consecutive months, which is quite rare… So yes, investors are rightly concerned,” Akshata Bailkeri, equity analyst at Bruderman Asset Management, told Yahoo Finance. “But the reason we’re seeing this is that those earnings behind a lot of these companies continue to grow, and that’s really what drives these index stocks up.”
As FactSet pointed out in its last Weekly Report, consensus analysts are still looking for S&P 500 earnings growth of nearly 28% for the third quarter. Although this is a deceleration from the growth rate of over 80% posted in the second quarter of this year, it would still mark the third largest increase in earnings for the index since 2010. The third quarter earnings season is set to recover next month.
“I don’t think statistics or just how long it’s been a good reason [for a market correction]. Usually you need some kind of negative catalyst, ”Randy Frederick, Chief Derivatives Trading Charles Schwab told Yahoo Finance. “What we have right now is not so much negative catalysts as a lack of positive catalysts.”
“I think what has caused some of this more recent volatility is that we’ve had a number of Wall Street companies lowering both the GDP estimates and the corporate earnings estimates.” , he added. “These are just predictions; they may turn out to be wrong. Certainly the past two quarters earnings results have far exceeded expectations.”
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6:10 p.m. ET Wednesday: Stock futures open higher
Here are the main movements on the markets on Wednesday evening:
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S&P 500 Futures Contracts (ES = F): +4 points (+ 0.09%) at 4,485.75
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Dow Futures (YM = F): +23 points (+ 0.07%) at 34,842.00
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Nasdaq Futures (NQ = F): +9.25 points (+ 0.06%) at 15,413.25
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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