U.S. stock futures advance ahead of July inflation report

The S&P 500 has declined six of the last seven sessions.

What’s driving markets

The consumer price index for July is slated for release at 8:30 a.m. Eastern and economists polled by the Wall Street Journal expect 0.2% monthly gains for both the headline and the core rate, excluding food and energy prices, which would mean the headline year-over-year rate of inflation would actually increase to 3.3%, but the core would slip to 4.7% from 4.8%.

“We see a continued disinflation in goods, and slowing shelter and broader services momentum, but at a slower pace than witnessed in the first half of 2023,” said Andrew Patterson, senior international economist at Vanguard. “Although underlying inflation data suggests a decelerating trend, we maintain reservations about a seamless path towards 2% inflation by next year.”

With about 90% of second-quarter earnings reporting from S&P 500 index companies now published, the percent beating forecasts on earnings has improved from the previous quarter, but fewer are beating on sales, said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.

“Reporting season has been fine in our view but not good enough to fend off a bit of choppiness in the equity market,” she said. “While the conversation around outlooks has seemed a bit thin, the outlook commentary has generally been fine with most of those who have commented highlighting resiliency, strength despite headwinds, normalization, and ongoing uncertainty.”

The upside of earnings season being largely done is companies are now free to resume their stock buyback programs.

Companies in focus

• Walt Disney Co. shares
  DIS,
  -0.73%
  rose 2% in premarket trading after the media giant reported a mixed third-quarter and said it will raise prices on almost all of its streaming packages in an aggressive push to boost profit.

• Capri Holdings shares
  CPRI,
  -1.70%
  jumped 24% after A Wall Street Journal story  said Tapestry
  TPR,
  -0.87%,
  the owner of Coach, was in talks to buy Capri, the parent company of Michael Kors, Jimmy Choo and Versace. 

• Plug Power Inc. stock
  PLUG,
  -1.47%
  dropped nearly 12% after the alternative-energy company saw losses for the second quarter increase more than Wall Street expected.

• Alibaba Group Holding Ltd.
  BABA,
  +0.67%
  was up more than 2% in Thursday’s premarket trading after the Chinese e-commerce giant topped expectations with its latest revenue and earnings.