Economic data took center stage once again Thursday. U.S. stock futures were indicating a higher open, taking their cues from Europe where the euro is trading higher after a Spanish bond auction went off without incident. However, futures ticked lower after economic data came in worse than expected. There is a bevy of economic data out today that will hold court over the markets. The initial verdict wasn't a good one.
Initial claims rose to 472,000, well above the Briefing.com consensus estimate of 450,000. Continuing claims rose to 4.571 mln from 4.483 mln. The numbers were disheartening and indicate firms remain uneasy about the demand outlook. The data also support the idea of a jobless recovery, which impedes a recovery in the housing market, thus increasing fears of a double-dip recession.
The cost of living in the U.S. was expected to decline in the month of May. The actual came in even lower providing further affirmation that the Fed will be on hold for some time yet. Inflation pressures are simply not a problem at this juncture.
The CPI reading for the month of May fell by 0.2%. The consensus estimate mirrored the prior month's reading of -0.1%. The core CPI, which excludes food and energy, rose 0.1% -- in-line with estimates.
The trend in core CPI is clearly one of disinflation. Over the last 12 months, core CPI, has risen 0.9% -- well below the 2% average annual increase over the past 10 years, according to the Bureau of Labor Statistics.
The bright spot was the current account deficit, which came in lower than expected. In the first quarter, the figure fell to $109 bln vs. a consensus of $124.0 bln.
After a disappointing start to the day, market participants will now shift gears to the leading indicators, hoping for signs of a pick-up in economic activity. The Conference Board's leading economic indicators, which measure the 3-6 month outlook, rose 0.4% in April. If the gains continue in May, it will be the 14th month in the past 15 that the outlook has risen. The Briefing.com consensus estimate is for 0.5%.
Also released at 10:00 a.m. ET today is the June Philadelphia Fed business outlook survey for which the consensus is 20.0 and the prior reading is 21.4.
The demand for Spanish debt -- they sold 3.5 bln euros ($4.3 bln) of 10 and 30-year notes and bonds -- is easing sovereign debt concerns. After reaching an all-time high yesterday, Spain's bond spreads narrowed against the German bund, ahead of the EU summit taking place today.
There is little earnings news to speak of premarket. Oil is trading slightly lower following a bearish inventory report yesterday.
BP (BP) will be in the headlines today, once again. Yesterday, the beleaguered oil giant suspended its dividend and established a $20 bln escrow fund -- both of which has brought in the buyers. Today, CEO Tony Hayward will testify in front of what will likely be a contentious House Energy & Commerce Subcommittee on Oversight & Investigations.
The bright spot was the current account deficit, which came in lower than expected. In the first quarter, the figure fell to $109 bln vs. a consensus of $124.0 bln.
After a disappointing start to the day, market participants will now shift gears to the leading indicators, hoping for signs of a pick-up in economic activity. The Conference Board's leading economic indicators, which measure the 3-6 month outlook, rose 0.4% in April. If the gains continue in May, it will be the 14th month in the past 15 that the outlook has risen. The Briefing.com consensus estimate is for 0.5%.
Also released at 10:00 a.m. ET today is the June Philadelphia Fed business outlook survey for which the consensus is 20.0 and the prior reading is 21.4.
The demand for Spanish debt -- they sold 3.5 bln euros ($4.3 bln) of 10 and 30-year notes and bonds -- is easing sovereign debt concerns. After reaching an all-time high yesterday, Spain's bond spreads narrowed against the German bund, ahead of the EU summit taking place today.There is little earnings news to speak of premarket. Oil is trading slightly lower following a bearish inventory report yesterday.
BP (BP) will be in the headlines today, once again. Yesterday, the beleaguered oil giant suspended its dividend and established a $20 bln escrow fund -- both of which has brought in the buyers. Today, CEO Tony Hayward will testify in front of what will likely be a contentious House Energy & Commerce Subcommittee on Oversight & Investigations.
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