Futures steady with focus on Fed speakers, economic data
(Reuters) – U.S. stock index futures were muted on Monday, as investors awaited comments from a bunch of policymakers and data to gauge the outlook for interest rates and the economy’s health, days after the Federal Reserve commenced its easing cycle.
The Fed’s pivotal move on monetary policy in the previous week propped up Wall Street’s main indexes for monthly gains, bucking a historical trend where September has been a weak month for equities on average.
Having rallied for much of the year, the S&P 500 is a whisker away from an all-time high and the blue-chip Dow closed at a record high on Friday. However, with the benchmark index’s valuations above its long-term average, some caution prevails about further bids.
At 5:36 a.m. ET, Dow E-minis were up 7 points, or 0.02%, S&P 500 E-minis were up 5.25 points, or 0.09% and Nasdaq 100 E-minis were up 32.5 points, or 0.16%.
Data on Friday showed equity fund managers raised their net long positions in S&P 500 futures contracts in the week ended Sept. 17.
All eyes will be on Fed officials this week, including Chair Jerome Powell on Thursday, as markets await their insights on the state of the economy, which most analysts believe is robust, and the outlook for monetary policy.
Governor Christopher Waller moved the needle on trader bets in the previous session, after saying upcoming inflation data could undershoot the Fed’s 2% target. On the other hand, Michelle Bowman, who voted for a 25 basis point reduction at the central bank’s previous meeting, said price pressures were still persistent.
Traders now expect with a 53% chance that the central bank’s next move will be to ease by 50 bps – up from 29.3% a week ago, as per the CME Group’s (NASDAQ:CME) FedWatch Tool. Bets for a 25 bps reduction stand at 47%.
On the day, remarks from Fed presidents including Raphael Bostic, Austan Goolsbee and Neel Kashkari are due.
“The Fed made a forceful case at its September meeting that the U.S. economy remains on solid ground, with few signs of an impending recession. However, markets are likely to remain sensitive to weak economic releases,” analysts at UBS said.
On the data front, a preliminary survey on September manufacturing and services activity is on tap at 9:45 a.m. ET. But the spotlight will be on Friday’s personal consumption expenditure figure for the month of August – the Fed’s preferred inflation gauge.
Among top movers, Intel (NASDAQ:INTC) rose 4% in premarket trading after a report showed Apollo offered to make an investment of as much as $5 billion in the chipmaker. Separately, sources said Qualcomm (NASDAQ:QCOM) has explored a potential acquisition of the company.