S&P 500 Bulls Hoping PCE Price Index Signals Cooling Inflation

The major U.S. stock index futures are trading lower on Thursday, shortly before the release of several key reports that will offer traders fresh insights into how high interest rates and inflation are affecting consumers, as personal spending and income figures for October will be published. Investors are likely to pay the most attention to the PCE price index, the Fed’s favorite inflation gauge, due to be released at 13:30 GMT.

At 12:46 GMT, Dow Jones Industrial Average futures are trading 34574.00, down 25.00 or -0.07%, the S&P 500 Index futures contract is at 4083.50, up 2.25 or +0.06% and the NASDAQ Composite is trading 12040.75, down 1.50 or -0.01%.

Job Cuts Rise in November

In keeping with this week’s labor market theme, the rate of job cut announcements at U.S. employers in November was more than five times greater than a year ago, according to a report by Challenger, Gray & Christmas. Overall, U.S.-based firms announced 76,835 job cuts in November, led by the technology sector. So far this year, tech companies have announced nearly 81,000 cuts.

Salesforce Shares Fall as Co-CEO Announces Departure

Shares of software company Salesforce are expected to open lower on Thursday after slumping more than 6.5% in overnight trading.

The stock fell after co-CEO Bret Taylor announced he was leaving the company. The departure leaves Marc Benioff alone as the sole CEO of the company.

The decline in shares came despite a beat on the top and bottom lines in the recent quarter. Earnings per share guidance for the fourth quarter came in above estimates.

Snowflake Shares Lower Ahead of Cash Market Opening

Snowflake’s shares were last down more than 5% in overnight trading after the company shared product revenue guidance that fell short of expectations.

Snowflake said it expects product revenue to range between $535 and $540 million in the fourth quarter. Analysts expected an estimate of $553 million, according to Street Account.

Daily Forecast

We’re expecting increased volatility ahead of the cash market opening as investors get the opportunity to react to a slew of reports on inflation, spending and income at 13:30 GMT.

The October PCE price index should show a 0.4% increase versus September. Year over year, PCE inflation should cool to 6% from September’s 6.2%. Core PCE, which excludes food and energy, is expected to be up 0.3%. The core PCE inflation rate is seen dipping to 5% from September’s 5.1%.

Bullish investors are hoping to see a cooling in PCE inflation after Fed Chair Jerome Powell said rate hikes could slow beginning in December. In order to make this happen, inflation is going to have to show signs of abating. If the PCE inflation remains too hot then this will cast doubts about whether the Fed could pull back on its aggressive rate hikes. This would be a negative for stock prices.