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U.S. Futures Lower; April CPI Data in Focus

Stock MarketsMay 12, 2021 06:55AM ET
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© Reuters.

By Peter Nurse   

Investing.com - U.S. stocks are seen opening lower Wednesday, continuing the recent selloff ahead of the eagerly-awaited April inflation release.

At 7:05 AM ET (1205 GMT), the Dow Futures contract was down 130 points, or 0.4%, S&P 500 Futures traded 18 points, or 0.4%, lower, and Nasdaq 100 Futures dropped 85 points, or 0.6%.

The blue-chip Dow Jones Industrial Average closed sharply lower Tuesday, dropping almost 500 points, or 1.4%, its worst day since February, while the S&P 500 slipped 0.9% and the Nasdaq Composite ended the day as the relative outperformer, closing down just 0.1%

Investors have started fretting about a potential sharp rise in prices, and what that means in terms of a speedy economic recovery and the Federal Reserve’s ultra-easy monetary policies.

St. Louis Federal Reserve President James Bullard on Tuesday joined the chorus of Fed speakers that have been at pains to state that it’s still not time to change the central bank’s accommodative stance. 

However, the latest consumer price data, due at 8:30 AM ET (1230 GMT), could well raise the pressure on the policy makers. The year-over-year reading will be distorted by base effects from last year's pandemic-induced plunge in energy prices, but consensus is for a 3.6% gain, which would be its highest since 2008.

Meanwhile, U.S. national average retail gasoline prices have risen above $3 a gallon for the first time since 2014, after a cyberattack shut operations at Colonial Pipeline, the main supply link for the East Coast.

Colonial has only restarted a small section in the five days since the shutdown, and doesn’t expect substantial restoration of service before the weekend.

Oil prices pushed higher Wednesday as a drop in U.S. crude stockpiles reassured traders that the recovery in demand remains on track.

The official government inventory report, due later Wednesday, is expected to largely confirm the American Petroleum Institute’s report. 

U.S. crude futures traded 1.2% higher at $66.04 a barrel, the Brent contract rose 1.1% to $69.31. Additionally, gold futures fell 0.1% to $1,834.60/oz, while EUR/USD traded 0.2% lower at 1.2125.

In the corporate sector, Amazon (NASDAQ:AMZN) won its fight against an EU order to pay about 250 million euros ($303 million) in back taxes to Luxembourg, while Electronic Arts' (NASDAQ:EA) outlook for the full year turned out stronger than expectations and Carnival (NYSE:CUK) pushed back almost all cruise sailings to at least the end of July.

Pfizer (NYSE:PFE), and its partner BioNTech (NASDAQ:BNTX), could also be in focus as the U.S. Centers for Disease Control and Prevention will meet later Wednesday to discuss recommendations for the use of the drugmaker’s Covid-19 vaccine in children aged 12 to 15.

 

U.S. Futures Lower; April CPI Data in Focus
 

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Comments (4)
Alan Rice
Alan Rice May 12, 2021 12:28PM ET
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Not to worry, I can still drive my Hummer through the bread line !!
king michael
king michael May 12, 2021 8:24AM ET
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The PPP (purchase weighted GDP) of US is keep dropping and has fall well behind of EU, Japan, China ... US Tech companies are facing serious trouble when keep losing world market due to political purpose. How those company survive? $ has been depreciating and FED has run out of powder. It is the perfectly the time to short US tech companies before they go bankrupt or dramatically under.
Don Burris
Don Burris May 12, 2021 7:51AM ET
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why would anyone believe the inflation numbers put out this morning. Everyone with s pulse knows we're experiencing increased inflationary pressure. Don't need the government lie to change reality.
king michael
king michael May 12, 2021 7:34AM ET
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Market crash is just in its early stage. Short now and profit huge soon. National debt is now over 120% of GDP and interest payment only is close to $1 trillion a year which is about 4.5% of GDP. It will reach to about 10% of GDP in the next few years. As the government has been keep closing the door to world market in high tech since Trump time, most of US Tech companies will bankrupt especially the semiconductor sector while companies in EU, Japan, Korea ... are growing fast and are taking over the market.
John Klan
John Klan May 12, 2021 7:34AM ET
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How's the market crash when the government just pumped 4 Trillion dollars onto the economy much of which hasn't even been spent yet and interest rates even if they rise some are still near historic lows?
Jouni Matero
Jouni Matero May 12, 2021 7:34AM ET
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And you think that 4 trillion just came out of nowhere without affecting dollar power?
Anton Kazakov
Anton Kazakov May 12, 2021 7:34AM ET
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Jouni Matero  When the dollar has lost its strength, you are better off having assets than just cash. Companies produce goods and valuable software, whatever inflation is, it will be incorporated into the cost of these goods. Those. Will people either run to buy goods, or the companies stocks that produce them, you will bet on lowering the valuation of these goods (which are growing in price)? Ok. High rates reduce liquidity in the market and this slows down inflation, including in securities, but the companies themselves continue to generate profits, lol, and buyout stocks.
 
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