U.S. stock futures were slightly positive during early trading on Thursday after the Nasdaq Composite rose for the third session despite a red-hot consumer price index report.
Dow futures were up 49 points. S&P 500 futures rose about 0.1%, and Nasdaq 100 futures gained roughly 0.1%.
In early earnings action, Delta Air Lines posted a beat on profit and revenue and reaffirmed full-year guidance. Shares rose about 2.7% in premarket trading. Elsewhere, shares of homebuilder KB Home rallied more than 6% in after hours trading after reporting better-than-expected earnings.
Analysts expect fourth-quarter earnings to be up 22.4%, according to Refinitiv, but guidance for 2022 from companies will likely be a key determinant for market action.
Elsewhere, Dow component Boeing rose about 3% premarket following a Bloomberg News report that the company’s 737 Max could resume service in China as soon as this month.
On Wednesday, the major averages rose despite the consumer price index showing the highest year-over-year increase since June 1982, it was largely in line with Wall Street expectations. The Dow Jones Industrial Average rose about 38 points and the S&P 500 added 0.3%. The Nasdaq Composite gained for the third straight day, climbing 0.2%.
The December consumer price index, a key inflation measure, increased 7%, according to the department’s Bureau of Labor Statistics.
“Stocks shook off the sticker shock of the historically high inflation number, but that was also widely expected and incredibly a non-event today really,” said Ryan Detrick of LPL Financial. “What we are excited about is earnings season is right around the corner. We expect another solid showing by corporate America, while it will also be a chance to stop focusing so much on the Fed and policy, but instead get under the hood and see how the economy is really doing.”
The December producer price index, another measure of inflation, is then set to come out on Thursday morning. Economists surveyed by Dow Jones are looking for a 0.4% monthly increase on the headline number and a 0.5% gain after stripping out food and energy prices.
Also on the data front, initial jobless claims for the week ending Jan. 8 will be released at 8:30 a.m. Economists polled by Dow Jones forecast 200,000 people filed for unemployment, down from the previous week’s 207,000.
Markets also will be watching action on Capitol Hill, where Fed Governor Lael Brainard will be heading for her confirmation as vice chairman of the central bank’s policymaking Federal Open Market Committee.
Fourth-quarter earnings season kicks off this week with several major banks reporting on Friday before the bell.
“The stock market is of course still vulnerable near-term to a bad PPI inflation report, but earnings season is about to begin and given how strong economic growth was in the fourth quarter, expect more evidence of ongoing solid company earnings to help soothe contemporary Fed tightening and inflation fears,” said Jim Paulsen, chief investment strategist for the Leuthold Group.
For the week, the S&P 500 and Nasdaq are up 1.1% and 1.7%, respectively. The Dow is up slightly since Monday.