LIVE MARKETS-S&P 500 futures edge higher, yields fall after soft PPI
Invesco KBW Bank ETF KBWB | 0.00 | |
Dow Jones Industrial Average DJI | 0.00 | |
Invesco PHLX Semiconductor ETF SOXQ | 0.00 | |
Healthcare Select Sector SPDR XLV | 0.00 | |
CBOE Volatility Index | 0.00 |
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S&P 500 FUTURES EDGE HIGHER, YIELDS FALL AFTER SOFT PPI
E-mini S&P 500 futures ESc1 have strengthened slightly after the release of softer-than-expected Producer Price Index (PPI) data. The futures are now up about 0.3% vs. a gain of about 0.1% shortly before the numbers came out as Fed tightening bets have been reduced.
June PPI on a month-over-month basis came in at -0.3% vs. a 0.0% estimate. The year-over-year print was 5.5% as compared to the 6.2% Reuters Poll. The ex-food/energy PPI on a month-over-month basis came in at 0.2% vs. a 0.4% estimate. On a year-over-year basis, the ex-food/energy reading came in at 4.7% vs. the 5.2% Reuters Poll.
Separately, the Mortgage Market Index was 259.1 vs. 266.3 last week. The July NY Fed Manufacturing Index was 15.6 vs. an 8.8 Reuters Poll.
According to the CME's FedWatch Tool, the probability that the Fed leaves its current target rate of 3.50% to 3.75% unchanged at its July 28 to 29 FOMC meeting is now 89% vs. 83% just prior to the release of the data. The chance that the FOMC hikes rates by 25 basis points (bps) is now 11% from 17%.
Looking further out into 2026, interest rate probabilities based on Fed funds futures are now pricing in about 27 bps of hikes through year-end vs. about 33 bps shortly before the numbers were released.
The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.56%. It was around 4.61% just before the numbers came out. The yield ended Tuesday at 4.585%.
Most S&P 500 sector SPDR ETFs are higher in premarket trading with tech XLK.P, up about 0.7%, the leading gainer. Healthcare XLV.P, off about 0.4%, is the weakest group.
The Invesco KBW Bank ETF KBWB.O is up around 0.6%. The Invesco PHLX Semiconductor ETF SOXQ.O is advancing more than 1%.
Here is a premarket snapshot from around 8:56 a.m. ET.
(Terence Gabriel)
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