USTECH Reached Above $18300.00 levels In Pre-Trading Hours As First-Quarter Earnings Season Kicks Off
Key Takeaways:
- The Nasdaq100 futures index (USTECH) moved slightly higher on Friday during the Asian session, retaking $18300.00 levels
- U.S. wholesale prices rose less than expected in March, which suggests that inflation data is inherently inconsistent
- Atlassian Corporation, Plc. (NASDAQ: TEAM) and Fastenal, Co. (NASDAQ: FAST) led the list of top gainers and top losers, respectively, before the bell
- Investors look forward to the first-quarter earnings report of major U.S. financial institutions, set to be released before the bell
USTECH inched slightly higher on Friday during the Asian session, supported by slight strength in stocks in the information technology sector as investors continued to assess the latest inflation data reports released on Thursday and its impact on the Fed's rate trajectory while looking ahead to the release of corporate earnings from major U.S. banks.
As of press time, futures tied to the USTECH index rose around 0.06% (10.09 points) to trade at the $18313.85 level. The current price move follows after-hours trading gains that saw the main index price rise to the $18338.95 level, posting one of its best daily gains before paring gains and moving lower to settle at $18300.00 levels as a tech-centric rally led a heavy comeback from Wednesday's consumer inflation-fuelled sell-off.
A U.S. Bureau of Labor Statistics (BLS) report released on Thursday showed producer prices in the U.S. were up 0.2% month-over-month in March 2024, the smallest increase in three months. This follows a 0.6% rise in February and below forecasts of 0.3%. Year-on-year, the PPI rose 2.1%, the most since April 2023, after 1.6% in February. The core index increased 0.1% monthly, increasing the annual rate to 2.4%.
The better-than-expected U.S. wholesale inflation data report suggests that inflation data could be more consistent. It highlights the tough road ahead for the Fed in bringing inflation to the 2% target.
The wholesale inflation report comes a day after another U.S. BLS report showed that the headline consumer inflation rate accelerated to 3.2% in March. Core inflation remained steady at 3.8% but exceeded market forecasts of 3.7%.
The hotter-than-expected U.S. consumer inflation data report revealed that inflation continues to remain a menace in the U.S. and joins last Friday's stronger-than-expected U.S. jobs number in adding to expectations that the Fed may not move to lower interest rates as soon as the June meeting but instead have to wait further before starting cutting rates, presumably toward late 2024.
The probability of a 25-bps June rate cut following the two key indicators of inflation has lessened than before, as seen in CME's Fed Watch tool. The current pricing is 16.5%, down from 59.1% one week ago. The Fed's probability of leaving rates at 5.25 – 5.5% during the June meeting now stands at 83.0%, up from 34.2% one week ago.
That said, a tech-centric rally led by Apple (NASDAQ: AAPL) on Thursday was a key factor that lent heavy support to the main index, leading to a heavy comeback from Wednesday's consumer inflation-fueled sell-off. The U.S. tech giant's shares rose 4.3% after Bloomberg News reported the company's plans to overhaul its Mac products with new artificial intelligence-focused chips.
In other news, the number of people claiming unemployment benefits in the U.S. fell by 11,000 to 211,000 in the week ending April 6th, the lowest in one month, and below market expectations of 215,000. The decline countered the increase brought by the upwardly revised, two-month high in the earlier week to add further evidence of a tight labor market in the U.S. economy, in line with the strength in the latest jobs report, to add leeway for the Fed to hold rates higher for longer to combat inflation.
Gainers and Losers
Here are the top USTECH index movers today before the bell. This week, the main index is set to close with modest gains.
Top Gainers
The top performers on the USTECH Index were:
• Atlassian Corporation, Plc. (NASDAQ: TEAM) rose 4.84%/9.91 points to trade at $214.65 per share.
• Broadcom, Inc. (NASDAQ: AVGO) added 4.54%/60.09 points to trade at $1382.46 per share.
• Micron Technology, Inc. (NASDAQ: M.U.) gained 4.35%/5.31 points to trade at $127.51 per share.
Top Losers
The worst performers on the USTECH Index were:
• Fastenal, Co. (NASDAQ: FAST) lost 6.50%/4.86 points to trade at $69.88 per share.
• Regeneron Pharma, Inc. (NASDAQ: REGN) declined 1.70%/15.88 points to trade at $920.32 per share.
• Verisk Analytics, Inc. (NASDAQ: VRSK) shed 1.13%/2.56 points to trade at $223.36 per share.
Investors look forward to the first-quarter earnings report of major U.S. financial institutions, set to be released before the bell. Some financial institutions set to release their Q1 earnings reports include JPMorgan Chase, Wells Fargo, Citigroup, BlackRock, and State Street.
