Investors have lacked conviction over the last couple of sessions, leaving the equity market little changed since Monday's rally, but Wall Street is set to open lower this morning with S&P futures off by seven points (-0.3%). This follows a relatively quiet overnight session but a busier morning, with several notable earnings reports and economic data to digest.
Yesterday, the minutes from the July FOMC meeting showed that Fed officials are growing increasingly concerned about softer than expected inflation readings, but they still remain in favor of announcing a balance sheet move at the upcoming policy meeting. The possibility of a December rate hike is still a coin toss with the fed funds futures market pricing in an implied probability of 46.8%.
U.S. Treasuries are trading slightly lower this morning, giving back a small portion of yesterday's rally, with the benchmark 10-yr yield climbing one basis point to 2.24%. Meanwhile, the U.S. Dollar Index (93.81, +0.40) is trading 0.4% higher, extending its week-to-date gain to 1.0%. The greenback is currently up 0.7% against the euro at 1.1688 with the euro moving lower in the wake of ECB minutes, which indicated desire among policymakers to continue on the current path of very substantial accommodation.
On the data front, weekly Initial Jobless Claims came in at 232K, a bit below the 240K Briefing.com consensus. The August Philadelphia Fed Index came in at 18.9, stronger than the Briefing.com consensus of 17. Futures have moved off lows in the wake of the better-than-expected economic data.
More data is due out later this morning, with the July Industrial Production (Briefing.com consensus 0.3%) and Capacity Utilization (Briefing.com consensus 76.7%) report at 9:15 ET, followed by the Conference Board's Leading Economic Index for July (Briefing.com consensus 0.3%) at 10:00 ET. The only piece of data due out tomorrow is the preliminary August Michigan Sentiment.
In U.S. corporate news, Wal-Mart (WMT 78.74, -2.20) is trading lower by 2.0% despite beating current quarter estimates and issuing in-line guidance. Cisco (CSCO 31.40, -0.94) is also lower by 2% after reporting in-line earnings and revenues. Alibaba (BABA 168.12, +8.72) is higher by 5.5% after beating both top and bottom line estimates. Clothing retailer L Brands (LB 36.25, -3.34) is lower by 8% after reporting better-than expected earnings but issuing below-consensus guidance.
After the close tonight look for earnings from Gap (GPS), Applied Materials (AMAT), Ross Stores (ROST), Sportsmans Warehouse (SPWH) and America's Car-Mart (CRMT), among a few others. Tomorrow morning we get reports from Deere (DE), Estee Lauder (EL), Foot Locker (FL) and Hibbett Sporting (HIBB).