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Stock index futures pointed to a lower open Wednesday, but there is more economic data to come following the Tuesday CPI.
Nasdaq 100 futures (NDX:IND) -0.5%, S&P futures (SPX) -0.4% and Dow futures (INDU) -0.2% were slightly lower.
The 10-year Treasury yield (US10Y) fell 2 basis points to 3.74% and the 2-year yield (US2Y) fell 2 basis points to 4.61%.
Yesterday, “10Y Treasuries decisively crossed the 3.75% threshold, and the 2Y is quickly converging to 5%,” ING said. “Today’s stronger industrial production and retail sales should reinforce this trend, although the 2Y reaching 5% would either presuppose a much higher terminal rate than currently priced (5.25%) or hardly any rate cut within that horizon. It’s a tall order, but momentum is on the side of bears.”
January retail sales numbers arrive before the bell. Economists expect a rebound with a 1.8% rise, with core retail sales up 0.8% for the month.
Some “of the strength in January retail sales will be due to the improving supply of cars and trucks, allowing the huge backlog of demand to be met,” Pantheon Macro’s Ian Shepherdson wrote. “We already know that unit auto sales surged by 17.7% in January, bringing them closer in line with production, which returned to pre-Covid levels several months ago.”
“Unit auto sales, however, were still some 7.5% below their pre-Covid level in January, so a further increase – or at least the absence of a sudden slump – in the months ahead is entirely plausible.”
At the same time the February Empire State Manufacturing Index is out. The forecast is for it to come in at -18, less of a contraction than the month before.
Right before the start of trading, January industrial production is released. The consensus is for a 0.5% rise.
Among active stocks, Tripadvisor rallied on solid travel demand, while Devon Energy slumped after an earnings miss.
