Wall Street futures flat as investors weigh grim data
Futures tied to the S&P 500 were little changed on Wednesday after bleak consumer confidence data provided a sobering view on the health of the economy, while investors held back ahead of Federal Reserve Chair Jerome Powell's speech this week.
With the COVID-19 pandemic far from over and little signs of progress between U.S. lawmakers over the next rescue package, all eyes will be on Powell's address at the virtual Jackson Hole symposium on Thursday for an update on the Fed's stance.
The S&P 500 and the Nasdaq hit a series of record closing highs recently, driven by stimulus and demand for tech-focused stocks, even as economic data reflected an uneven recovery from a recession.
A survey on Tuesday showed U.S. consumer confidence was at a six- year low in August. Salesforce. com Inc ( CRM. N), which is set to enter the blue-chip Dow index .DJI next week, provided some succor with a 13.2% jump premarket after the cloud software maker raised its annual revenue forecast on surging demand for its online business software. Nordstrom Inc (JWN.N) tumbled 5.9% after reporting a bigger-thanexpected loss, as its stores were shuttered for about half of the reported quarter and consumers stayed home with little need for designer clothes.
Meanwhile, The dollar and the euro traded cautiously on Wednesday as investors refrained from taking risky bets a day ahead of a key speech by Federal Reserve Chairman Jerome Powell. Amid growing speculation Powell could unveil a softer policy stance towards inflation at the annual Jackson Hole retreat on Thursday, investors are bracing for the Fed's possible new steps to prop up the U.S. economy.
"Targeting average inflation over time rather than setting a fixed 2% goal would likely mean lower rates for longer", said Raffi Boyadjian, senior investment analyst at online broker XM. "Hence, if the Fed confirms such a move, the greenback would stand little chance of a meaningful rebound anytime soon", he added, calling the mood in currency markets "somewhat subdued" due to the uncertainty.
Both a policy change announcement or the lack of are expected to resonate strongly across trading floors. "Either the Chairman drops something juicy for "reflationistas" (aka USD bears) or the USD rips higher for a few weeks", Stephen Innes, chief global markets strategist at AxiCorp, wrote in a morning note. "I would never bet against the Fed sounding dovish during an easing cycle", he added.
The dollar index, which tracks the greenback's value against a basket of currencies =USD was up 0.1% at 93.11 after taking a hit on Tuesday following data showing U.S. consumer confidence tumbling to the lowest in more than six years. Data later on Wednesday is forecast to show growth in U.S. durable goods orders slowed in July, highlighting policymakers' concerns about the economy.
"A softer-than-expected figure should revive the Fed doves, while a better-than-expected read would improve the investor mood, but should not have a material impact on dovish Fed expectations as it is clear to everyone that the economy needs sustained support for posting good results," Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told her clients. Against the euro EUR= D3, the dollar stood at $1.1818 following a 0.4% decline in the previous session.
The yuan rose toward a sevenmonth high at $6.8908 after U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal, which eased concerns about a diplomatic standoff between the world's two- largest economies. The British pound GBP=D3 bought $1.3135 having risen 0.7% against the dollar on Tuesday.
Sterling has managed to shrug off a lack of progress in trade negotiations between Britain and the European Union. The dollar was locked into a narrow range against the yen, last trading at $106.23 JPY=EBS.