After a mixed session in the markets, stock futures opened up higher Thursday evening, with both earnings and inflation data remaining at the center of investor attention.
The S&P 500 contracts edged higher. There was a jump in technology stocks that posted a rebound after a drop on Wednesday, which caused the index to rise for the first time in three sessions. The index was on track to end the week marginally lower after five weeks of gains, but still held just slightly below all-time highs.
We've got a market that is incredibly huge. There shouldn't be much a surprise, given how much money has been pushed into the system, Lenore Hawkins, Tematica Research chief macro strategist, told Yahoo Finance Live. There's a lot of money that are chasing not a whole lot of alternatives. In October, consumer prices increased by a marked 6.2%, against the same month last year, to increase from September's already low 5.4% year-on-year rise.
There are implications for corporations, many of which have had to try and pass on rising prices to end consumers to preserve margins, and for the Federal Reserve. Market pricing suggests that the Federal Reserve will move in by mid- next year to raise interest rates to try and temper the inflationary trends.
Some economists have reknowned that the inflationary pressures will eventually ease, though they're likely to settling at a higher level than had been before the epidemic.
Inflation should moderate. We're talking about settling at 2%, 2.5% over the next 12 months, Gabriela Santos, JPMorgan Asset Management global market strategist, told Yahoo Finance Live. We're still talking about real wage gains, and that's extremely supportive certainly of people's livelihoods, but also of consumption and therefore the economy overall. She said we expect a big re-acceleration in growth starting this quarter and throughout next year, and 5% average growth just over the next three quarters. We would characterize this not as stagflation, but as reflation. It is a difference in the fact that reflation is quite good for earnings growth and quite good for the stock market, especially cyclical sectors.