US futures rise as bank fears ease; US econ data on the way
FILE - An NYSE sign is seen on the floor at the New York Stock Exchange in New York, Wednesday, June 15, 2022. (AP Photo/Seth Wenig, File)
Yuri Kageyama And Matt Ott, The Associated Press
Published Thursday, March 30, 2023 9:05AM EDT
Wall Street is poised to open with gains Thursday as worries over turmoil in the banking industry ease and attention turns toward government economic data coming out the next couple of days.
Futures for the Dow Jones Industrial Average and the S&P 500 rose 0.6% before the opening bell Thursday.
Markets recently have been wracked by worries about banks and fears the industry may be cracking under the pressure of much higher interest rates.
Forceful actions by regulators have helped to calm markets as investors have turned their focus to how central banks might adjust their interest rate policies to reflect persisting worries over how higher rates might affect lenders.
After regulators in Switzerland brokered a takeover of Credit Suisse by rival UBS, UBS said it’s bringing back its former CEO, Sergio Ermotti, to help it absorb Credit Suisse. Ermotti led a turnaround at UBS following the 2008 financial crisis.
The path ahead for the Federal Reserve and other central banks has become more tricky due to recently exposed stress in the banking industry. Elevated global inflation typically draws higher interest rates. Rising rates contributed to the failure of two banks this month, though it appears those higher rates exacerbated shoddy risk management practices at those banks. Other financial institutions are weathering those some conditions.
In their latest quarterly economic projections last week, Fed policymakers forecast that they expect to raise their key rate just once more — from its new level of about 4.9% to 5.1%. That's the same peak they had projected in December, but in light of all the recent banking turmoil, investors appear more optimistic than they have been in months.
Bank stocks have bounced back strongly this week, with most mid-to-large bank shares gaining anywhere between 3% and 7%.
For now, a resilient job market and strong consumer spending have been holding up the U.S. economy, with more data on the way for economists and investors to consider.
Later today, the government issues its weekly report on jobless claims, which generally represent the number of U.S. layoffs. The labor market has remained remarkably resilient even as the Fed has tried to loosen it with rate hikes. Also coming Thursday is the government's final estimate of how much the U.S. economy grew in the last quarter of 2022.
On Friday, the Commerce Department issues its February report on consumer spending. More important than the topline consumer spending figure, the report contains a measure of inflation that is closely watched by Fed policymakers and could give economists clues about the Fed's future actions.
In Europe at midday, Britain's FTSE gained 0.9%, France’s CAC 40 rose 1.3%, and Germany’s DAX jumped 1.2%.
In Asian trading, Japan’s benchmark Nikkei 225 shed 0.4% to finish at 27,782.93. Australia’s S&P/ASX 200 added 1.0% to 7,122.30. South Korea’s Kospi rose 0.4% to 2,453.16.
Hong Kong’s Hang Seng gained 0.6% to 20,309.13, while the Shanghai Composite advanced 0.7% to 3,261.25 after China’s new No. 2 leader, Premier Li Qiang, said the recovery from a long slowdown picked up pace in March.
The economy showed “encouraging momentum of rebounding” in January and February, Li said at the Boao Forum for Asia, a gathering of businesspeople and politicians on the southern island of Hainan.
“The situation in March is even better,” he said.
In energy trading, benchmark U.S. crude rose 56 cents to $73.53 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, also rose 56 cents to $78.15 a barrel.
In currency trading, the U.S. dollar edged down to 132.69 Japanese yen from 132.75 yen. The euro cost $1.0886, up from $1.0847.
Kageyama reported from Tokyo; Ott reported from Silver Spring, Md.
AP Business Writer Joe McDonald in Beijing contributed.