Stock Market Set to Open Mixed Today as Powell Heads to Capitol Hill
U.S. stocks were headed towards a slightly lower open on Wednesday, ahead of two days of Congressional testimony from the chair of the Federal Reserve as markets continue to hum and haw over inflation concerns.
In Asia, Tokyo’s
slipped 0.38%, while Hong Kong’s
declined 0.63%. The
fell 1.07%. The
in London was 0.4% lower as the pan-European
dipped 0.3%. The
in Paris dropped 0.2% and Frankfurt’s
moved 0.1% into the red. Dow industrials futures were pointing down around 40 points, set for a soft open after the index tumbled 107 points on Tuesday to close at 34,888.
is set to begin two days of testimony on Capitol Hill, where he will deliver his semiannual report on the state of the economy to Congress. The central banker is expected to stress the Fed’s relaxed policy stance.
“Today a group of people who are not economists will question someone who is not an economist about complicated economic issues,” said
the chief economist at UBS Global Wealth Management. “The whole process is likely descend into a partisan brawl which is no use to markets.”
Powell’s testimony comes after the U.S. consumer-price index notched a 0.9% rise from May to June, stoking the debate over inflation concerns as CPI gained at the fastest monthly rate since 2008.
“Yesterday’s U.S. CPI confirms whatever you thought about inflation before it was published,” Donovan said. “Either inflation is no problem at all, or a Weimar style hyperinflation is just around the corner—you just have to manage the numbers to suit your bias. A small number of prices rose huge amounts, but there is outright deflation in some parts of the index.”
The travel sector was taking a beating, led down by shares in
the world’s largest tourism group and an operator of hotels, airlines, and cruises.
stock dropped while airlines
—the owner of
—nosedived along with shares in hotels giant
InterContinental Hotels Group.
Shares in major British multinationals, which do business in dollars and are sensitive to currency shifts, were broadly lower. UK. inflation data, showing a rise in consumer prices and relative decline in producer prices, saw sterling strengthen by more than 0.2% against the dollar.
British American Tobacco
were among the fallers in London.
rose near 6% after the German luxury fashion group reported earnings before interest and taxes of €42 million ($49.5 million), crushing expectations of around €17 million.
stock rose 1% as one of the UK.’s largest housing developers said in a trading update that it expects full-year profit before tax to be above the top end of the range of market expectations.
On the U.S. economic front, investors can expect the U.S. producer price index for June, while the Fed will publish its Beige Book—a summary of economic conditions released eight times a year.
With corporate earnings season under way,
Bank of America,
are due to report results.
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