Stock futures fall after strong inflation data

(Reuters) – U.S. stock futures fell on Friday after consumer prices in December posted their biggest gains in 11 months, raising expectations of inflation gaining momentum this year.

The Labor Department’s Consumer Price Index, which excludes the volatile food and energy components, rose 0.3 percent last month. Economists polled by Reuters had forecast core CPI rising 0.2 percent.

Core CPI increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November.

“I don’t think CPI data changes our impression about monetary policy. December was a mild disappointment in terms of retail sales, as it came a touch below expectations,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

“But if there is any negative reaction to the data, it should get washed out as we open.”

Another set of data showed U.S. retail sales increased in December and figures for the prior month were revised higher, suggesting that the economy exited 2017 with strong momentum.

The Commerce Department said retail sales rose 0.4 percent last month. Economists polled by Reuters had forecast retail sales increasing 0.4 percent in December.

Futures snapshot at 8:43 a.m. ET (1443 GMT), Dow e-minis 1YMc1 were up 63 points, or 0.25 percent, with 35,059 contracts changing hands.

S&P 500 e-minis ESc1 were down 0.75 points, or 0.03 percent, with 179,279 contracts traded.

Nasdaq 100 e-minis NQc1 were down 12.25 points, or 0.18 percent, on volume of 42,118 contracts.

JPMorgan Chase & Co (JPM.N) rose 0.38 percent in choppy premarket trading after the biggest U.S. bank by assets reported profit that beat estimates, benefiting from higher interest rates and loan growth.

Wells Fargo (WFC.N) fell 1.13 percent as the bank set aside more money in the fourth quarter to cover expenses related to probes into its mortgage and sales practices.

    PNC Financial Services’ (PNC.N) quarterly profit doubled, driven by a $911 million one-time benefit related to the new tax law. Its shares rose marginally.

    “I don’t think you would’ve seen a big pop in bank stocks, no one’s surprised by these numbers,” said Ron Weiner president and founder of RDM financial in Westport Connecticut.

    While tax-related costs are expected to weigh on banks’ earnings, they are expected to benefit in the long run from lower tax burden.

    Earnings for S&P 500 companies are expected to increase on an average by 11.8 percent in the quarter with profit for financial services companies growing as much, according to Thomson Reuters I/B/E/S.

    One of the Fed’s most influential members, New York Fed Chief William Dudley said on Thursday the tax cuts could provide a short-term boost but risk overheating the economy.

    Facebook (FB.O) slipped more about 5 percent after the company started changing the way it filters posts and videos on News Feed.

    Advanced Micro Devices (AMD.O) fell 3.8 percent after the company said its microprocessors are prone to both variants of the Spectre security flaw, days after saying its risk for one of them was “near zero”.

    Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

    Source: Reuters

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