Stock futures ticked higher on Monday as Wall Street braced for the first of two significant inflation readings this week. The producer price index (PPI), a key measure of wholesale inflation, is set for release at 8:30 a.m. ET. Traders are adjusting to a market environment where good news paradoxically translates into bad news, at least in the short term. Economists polled by Dow Jones anticipate that headline PPI grew by 0.4%, while the core figure rose 0.3%.
"On a short-term basis, the market has shifted back to a good-news-is-bad-news backdrop," – Adam Turnquist, chief technical strategist at LPL Financial.
Despite an increase in its holiday outlook for earnings and revenue, Lululemon saw its shares slip more than 2%. In contrast, IAC Inc.'s stock gained over 2% following its announcement to spin off home improvement marketplace Angi. Traders are moving away from Big Tech names, with Nvidia sliding nearly 2%, and are instead investing in sectors like energy, health care, and materials.
The December PPI reading and the upcoming consumer price index report due Wednesday are expected to serve as crucial market catalysts. Markets currently suggest an 80% likelihood that interest rates will remain in their current target range of 4.25%-4.5% through March. Analysts polled by FactSet had set expectations for $5.66 per share on $3.47 billion in revenue.
KB Home exceeded analysts' expectations, posting earnings per share of $2.52 on revenue of $2 billion. Analysts polled by LSEG had anticipated earnings of $2.45 per share and $1.99 billion in revenue. This strong performance saw KB Home's shares rise more than 8%.
The 30-stock Dow Jones Industrial Average climbed nearly 0.9% as traders invested in stocks like Chevron and UnitedHealth. Meanwhile, S&P 500 futures advanced by 0.22%, and Nasdaq 100 futures increased by 0.32%. These movements come as Wall Street prepares for pivotal economic data that could sway market sentiment.
Japan's markets stood out as an anomaly in the global financial landscape, with the Nikkei 225 dipping by 1.83% to close at 38,474.30. This deviation from the general upward trend highlights regional differences in market reactions to global economic indicators.