Stock Futures Hold Gains as Inflation Appears Tame
NEW YORK ( TheStreet) -- Stock futures were holding gains Tuesday as investors weighed moderate inflation numbers and less-than-expected housing starts heading into the first-day of the Federal Reserve's two-day policy meeting.
Futures for the S&P 500 were up 2.75 points, or 4.51 points above fair value, to 1,636.5.
The Bureau of Labor Statistics Tuesday reported that the consumer price index rose by a less than expected 0.1% in May after falling 0.4% in April. Economists on average were expecting the CPI to rise 0.2%. Excluding food and energy, the core CPI increased 0.2%, as expected, after rising 0.1% the prior month.
The Census Bureau meanwhile reported that housing starts rose 6.8% to a seasonally adjusted annual rate of 914,000 in May, which was less than the 950,000 pace expected by economists. Building permits last month fell 3.1% to a lower than expected seasonally adjusted annual rate of 974,000. Economists were predicting a pace of 975,000 for building permits.
Another month of weak inflation numbers has fueled confidence among some investors that the Fed will not look to reduce its $85 billion-a-month asset purchase program just yet as bond yields continue to tise. However, the market is bracing for the possibility Fed Chairman Ben Bernanke will indicate during his press conference Wednesday that a slowdown in purchases has become more conceivable amid signs of an improving economy.
Futures for the Dow Jones Industrial Average were rising 31 points, or 51.15 points above fair value, to 15,152 while the futures for the Nasdaq were adding 9 points, or 9.44 points above fair value, to 2,973.75.
Loeb recommends in the letter that Hirai serve as chairman of both the electronics business and the spun-off entertainment business.
Major U.S. stock markets pared gains Monday afternoon following a Financial Times report that the Federal Reserve is likely to address tapering of its monetary stimulus.