US stock futures rose on Thursday after encouraging results for retailer Macy’s indicated consumer demand is holding up, helping investors look past disappointing data on America’s economic output.
Ahead of the opening bell on Wall Street, S&P 500 futures advanced 0.4 per cent, with Nasdaq 100 futures up 0.1 per cent. The regional Stoxx Europe 600 index rose 0.3 per cent, while the FTSE 100 was flat and Germany’s Dax index was up by 0.7 per cent.
After a difficult few weeks for US consumer companies including profit warnings for retailers Target and Walmart, a strong performance by Macy’s offered a counterpoint to indications of a demand slowdown. Shares in the retailer rose by 14 per cent in pre-market trading after it raised its 2022 profit forecast.
Markets have been choppy in recent weeks as traders prepare for global central banks, led by the Federal Reserve, to tighten monetary policy in an attempt to cool inflation even as concerns increase that global growth is faltering.
“The market is paying more attention to economic data. A few weeks ago it was all about inflation, not so much about other macro data. Now everything that could affect growth is important, especially all that’s related to consumption,” said Anne Beaudu, a global fixed income portfolio manager at Amundi.
Investors received a mixed batch of US economic data on Thursday.
A second reading on gross domestic product showed the world’s biggest economy contracted at an annualised rate of 1.5 per cent in the first quarter, slightly worse than the previous estimate of 1.4 per cent. The decline came as the US trade deficit widened, government spending declined and commercial inventory investment dipped, according to a report from the commerce department. However, consumption, a key component of US GDP, continued rising.
Meanwhile, first-time claims for unemployment benefits fell last week to 210,000, compared with 218,000 in the previous period and better than the 215,000 that economists polled by Refinitiv expected.
The reports follow the publication late on Wednesday of minutes from the most recent meeting of the US central bank showing it was prepared to swiftly raise rates over coming months.
“No doubt [Federal Reserve Committee] members are well aware of the risk of a recession caused by yanking up interest rates,” said Antje Praefcke, senior currency analyst at Commerzbank. “However, as inflation was at the forefront of everyone’s minds in early May, it should not have come as a surprise that the minutes do not reflect any thoughts of a recession or hard landing.”
In Asia, Hong Kong’s Hang Seng index was down 0.3 per cent and Japan’s Topix index was flat.
