Dow Futures Up 140 Pts; Positive Corporate News Ahead of U.S. CPI

Dow Futures Up 140 Pts; Positive Corporate News Ahead of U.S. CPI

Dow Futures Up 140 Pts; Positive Corporate News Ahead of U.S. CPI

By Peter Nurse — U.S. stocks are seen opening higher Monday, continuing the recent positive tone generated by a generally healthy earnings season to date, ahead of the release of a key inflation report this week.

At 07:00 AM ET (1100 GMT), the Dow Futures contract was up 140 points, or 0.4%, S&P 500 Futures traded 20 points, or 0.5% higher, and Nasdaq 100 Futures climbed 85 points, or 0.6%.

The broad-based S&P 500 index posted gains of around 0.6% last week, its third winning week in a row, helped by mostly upbeat quarterly earnings, surprising investors who had been worried that high inflation and rising interest rates were going to result in a gloomier outlook on both businesses and the economy.

Companies are more than halfway into the second-quarter reporting period and so far, some 78% of earnings reports are beating expectations, above the long-term average, according to data from Reuters.

There are more earnings due this week, with Walt Disney (NYSE:DIS), the highest profile name, to report after the market close on Wednesday.

As far as Monday is concerned, Tyson Foods (NYSE:TSN) will provide an insight into soaring food prices, while Palantir (NYSE:PLTR) and Take-Two Interactive (NASDAQ:TTWO) report after the bell.

Pfizer (NYSE:PFE) said on Monday it has agreed to buy blood disorder drugmaker Global Blood Therapeutics (NASDAQ:GBT) in a $5.4 billion deal, while biotech firm BioNTech (NASDAQ:BNTX) stated earlier Monday that it expects to begin deliveries of two Omicron-adapted vaccines as soon as October, which will help spur demand in the fourth quarter.

Investors will also be concentrating on Wednesday’s consumer price index figures, particularly after Friday’s much stronger-than-expected July jobs report.

The addition of over 500,000 to the nonfarm payrolls likely provided the green light for the Federal Reserve to continue its aggressive campaign to tame the highest inflation in decades. Particularly, with the annual rate of inflation expected to only moderate to 8.7% in July from 9.1% in June, which was the largest increase since 1981.

Oil prices weakened Monday, falling near to multi-month lows as recession fears weigh heavily on the demand outlook.

The latest data pointed to a slow recovery in China, the world’s top crude importer, from the COVID-19 shutdown. The second-largest economy in the world imported 8.79 million barrels per day of crude in July, up from a four-year low in June, but still 9.5% lower than a year ago.

By 07:00 AM ET, U.S. crude futures traded 1% lower at $88.08 a barrel, after dropping just under 10% last week. The Brent contract fell 1% to $93.96, after a weekly loss of just under 14% last week, falling to their lowest levels since February.

Additionally, gold futures rose 0.3% to $1,795.85/oz, while EUR/USD traded 0.1% higher at 1.0186.