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U.S. stock index futures were little changed Thursday as investors digested the latest earnings reports in the wake of better than expected January retail sales data in the previous session.
How are stock-index futures trading
-
S&P 500 futures
ES00,
-0.16%
rose 5 points, or 0.1%, to 4163 -
Dow Jones Industrial Average futures
YM00,
-0.06%
added 21 points, or 0.1%, to 34195 -
Nasdaq 100 futures
NQ00,
-0.21%
climbed 24 points, or 0.2%, to 12754
On Wednesday, the Dow Jones Industrial Average
DJIA,
rose 39 points, or 0.11%, to 34128, the S&P 500
SPX,
increased 11 points, or 0.28%, to 4148, and the Nasdaq Composite
COMP,
gained 110 points, or 0.92%, to 12071.
What’s driving markets
Equity benchmarks continue to trundle higher, befuddling those observers accustomed to equating higher bond yields with softer stocks.
In recent sessions traders have absorbed data showing U.S. inflation being stubbornly sticky and strong retail sales. These follow a surprisingly strong jobs report at the start of the month.
Consequently, benchmark U.S. Treasury yields
TMUBMUSD10Y,
are near their highest for 2023, yet the S&P 500 index sits just shy of its best level since August, having bounced 8% for the year to date.
“Are rising rates and yields a sign of normality or looming trouble again? Is U.S. inflation hitting a glitch in its disinflationary journey? Is a soft, hard or no landing more likely now after what we’ve seen so far this year?” asked Jim Reid, strategist at Deutsche Bank.
Stephen Innes, managing partner at SPI Asset Management, expressed similar exasperation: “{T]his is a market that constantly asks different questions at different prices and on different days, and of course, there is no shortage of different answers.”
An indication of just how relaxed investors have become about the current market scenario can be seen in the level of the CBOE VIX index
VIX,
A measure of expected S&P 500 volatility, the VIX, which tends to jump when traders get anxious, is hovering near 18, below its long run average of 20.
Part of the reason for the declining VIX is that the S&P 500 has been meandering in a relatively tight range for the last 10 sessions, noted Mark Newton, head of technical strategy at Fundstrat.
“U.S. equity markets are holding up far better than might be expected with Treasury yields pressing higher. This will be something to continue to watch carefully,” he said in a note to clients.
“There remains a realistic threat of minor weakness into late February, and this would be officially underway on SPX break of 4060 (though even weakness under 4095 would warn of this possibly getting underway). Conversely, 4160 and also 4176 are the two areas to monitor on the upside,” Newton added.
U.S. economic updates set for release on Thursday include weekly initial jobless benefit claims, the January producer price index, building permits and housing starts, and the February Philadelphia Fed manufacturing survey, all due at 8:30 a.m. Eastern.
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