U.S. Stocks May Show A Lack Of Direction In Early Trading
After closing mixed for two consecutive sessions, stocks may continue to show a lack of direction in early trading on Tuesday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 0.75 points.
Traders may be reluctant to make significant moves ahead of the release of a Labor Department report on consumer price inflation in the month of July on Wednesday.
Economists currently expect consumer prices to climb by 0.5 percent in July after advancing by 0.9 percent in June. The annual rate of consumer price growth is expected to slow to 5.3 percent from 5.4 percent.
Core consumer prices, which exclude food and energy prices, are expected to rise by 0.4 percent in July following a 0.9 percent increase in June. Year-over-year core price growth is expected to drop to 4.3 percent from 4.5 percent.
The Labor Department is scheduled to release a separate report on producer price inflation in the month of July on Thursday.
The inflation data could have an impact on the outlook for monetary policy, although the next Federal Reserve meeting is not scheduled until September.
Preliminary data released by the Labor Department this morning showed labor productivity in the U.S. increased by much less than expected in the second quarter.
The Labor Department said labor productivity jumped by 2.3 percent in the second quarter after soaring by a downwardly revised 4.3 percent in the first quarter.
Economists had expected productivity to surge up by 3.5 percent compared to the 5.4 percent spike that had been reported for the previous quarter.
The report also showed unit labor costs climbed by 1.0 percent in the second quarter, just shy of economist estimates for an increase of 1.1 percent.
Meanwhile, the 1.7 percent jump in labor costs previously reported for the first quarter was revised to a 2.8 percent decrease.
The major U.S. stock indexes turned in another mixed performance during trading on Monday after ending last Friday’s trading on opposite sides of the unchanged line.
While the Dow and the S&P 500 pulled back off last Friday’s record closing highs, the tech-heavy Nasdaq edged slightly higher.
The Nasdaq inched up 24.42 points or 0.2 percent to 14,860.18, but the S&P 500 slipped 4.17 points or 0.1 percent to 4,432.35 and the Dow fell 106.66 points or 0.3 percent to 35,101.85.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.2 percent as trading resumed following a long weekend, while China’s Shanghai Composite Index jumped by 1 percent.
Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.2 percent.
In commodities trading, crude oil futures are climbing $0.91 to $67.39 a barrel after tumbling $1.80 to $66.48 a barrel on Monday. Meanwhile, after plunging $36.60 to $1,726.50 an ounce in the previous session, gold futures are rising $4.40 to $1,730.90 an ounce.
On the currency front, the U.S. dollar is trading at 110.45 yen compared to the 110.29 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1718 compared to yesterday’s $1.1737.
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