Stock Futures Gain Behind Consumer Sentiment

Stock Futures Gain Behind Consumer Sentiment

Wall Street futures rose this morning as futures terminating in December for both the S&P 500 and the Dow gained 0.3%, while those for the Nasdaq added 0.5%.  

Stock Futures Gain Behind Consumer Sentiment
Stock Futures Gain Behind Consumer Sentiment

US investors await data for American consumer confidence to be released this morning, along with manufacturing and service industry data to come later in the week. Futures are not always a direct predictor of the day’s stock movement.

With the fourth quarter looming, US policy makers could also pare back the stimulus offered through the first three quarters.

“Investors are contemplating the potential impact of the third round of quantitative easing ending in October,” Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich, told Bloomberg. “But compared with QE1 and QE2, the US economy appears to be on better footing.”

Consumer sentiment forecast to rise
The Conference Board will release a report on US consumer confidence, which a survey of Bloomberg analysts speculated will surge to the highest plane in nearly seven years. Meanwhile, a separate report could indicate a sluggish housing price increase from July 2013 to July 2014 across 20 US cities.

Other data on manufacturing and service industries is set to be released later in the week, along with the Commerce Department’s monthly labor report.

The US Federal Government made a pledge to maintain low interest rates levels for considerable time, but many economists still expect a hike in the next year. If the economy shows it is healthy enough to survive higher rates, the central bank could move forward sooner than expected.

Inflation remains below target
According to the Wall Street Journal, the personal consumption expenditures price index gained only 1.5% in August from the previous year, per a Commerce Department report from Monday. The index is the preferred inflation measure for the Fed, whose target is 2%. It was the 28th consecutive month the data fell short of the target.

The data revealed some economic weakness, and will likely provide an impetus for the Fed to stand by its policy of low interest rates.

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