Stephen Chernin
Stock index futures were little changed early Tuesday following a late rally for risk in the previous session.
S&P futures (SPX) were little changed. Dow futures (INDU) -0.1% and Nasdaq 100 futures (US100:IND) +0.1% were also close to the flatline.
The “rally in U.S. equities showed no sign of abating yesterday, as the S&P 500 closed at an all-time high for the fifth time in six sessions (and for the 30th time this year), taking its YTD gains to +14.75%,” Deutsche Bank’s Jim Reid said. “The advance was once again led by tech stocks, with the Magnificent 7 extending its YTD gains to +36.47%.”
Rates were also little changed after rising the day before. The 10-year Treasury yield (US10Y) rose 1 basis point to 4.29% and the 2-year yield (US2Y) rose 1 basis point to 4.78%.
“A sizeable amount of corporate issuance on Monday, which tends to lead to increased hedging activity, may have … contributed to the rise in yields,” Reid said. “The data flow will continue today, as we’ve got retail sales, industrial production and capacity utilization for May, so that will give us a better sense of economic performance into the middle of Q2.”
May retail sales figures hit before the bell and the forecast is for a 0.3% monthly rise, with core retail sales up 0.2%.
With “growth in real incomes after tax slowing, pandemic-era excess savings now largely gone and consumers’ confidence deteriorating, we expect the trend in real consumption growth to continue weakening,” Pantheon Macro’s Ian Shepherdson said.
Numbers on industrial production and capacity utilization for May arrive shortly before the start of trading. Economists expect that production rose 0.3% last month, with capacity utilization rising to 78.6%.
“US industrial production data is rarely a major market mover as the global importance of US manufacturing has declined over time,” UBS’ Paul Donovan said. “Nonetheless, with trade data offering some conflicting signals, it is helpful to get some sense of what is being made, and where.”
