S&P 500 Futures trace Wall Street’s gains to poke fortnight high, yields grind higher

• Market sentiment remains positive amid sluggish Asian session, light calendar.
• S&P 500 Futures stays firmer after US equities cheered upbeat earnings from Goldman, Netflix.
• Headlines from China, Russia have also been risk-positive even if UK Chancellor Hunt-inspired optimism fades in Britain.

The risk profile remains positive during the third consecutive day on early Wednesday even as a lack of major data/events restricts the market moves of late.

While portraying the sentiment, the S&P 500 Futures rise nearly 1.0% intraday to poke a two-week high, tracking Wall Street’s second daily gain, whereas the US 10-year Treasury yields add two basis points (bps) near 4.0% mark at the latest. It’s worth noting that the US Dollar Index (DXY) remains sidelined near 112.00 while crude oil recovers from a 12-day low marked the previous day, up 0.55% on the day near $84.15 as we write.

Wall Street closed with gains for the second consecutive day, led by S&P 500, as upbeat earnings from Goldman Sachs and Netflix joined Lockheed Martin to please bulls amid mixed US data. That said, US Industrial Production for September improved but the NAHB Housing Market Index for October dropped, respectively around 0.4% MoM and 38 versus the market expectations of 0.1% and 43 in that order.

Elsewhere, headlines suggesting the Russian soldiers’ struggle in Ukraine and UK Chancellor Jeremy Hunt’s ability to ward off the recession woes seem to propel the market’s optimism of late.

It should be noted that Minneapolis Federal Reserve Bank President Neel Kashkari said earlier in the day, “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes.” With this, the market's price in 94% chance of the Fed’s 75 bps rate hike in November and keep the DXY bulls hopeful despite the latest weakness.

Moving on, the second-tier US data, mainly relating to housing, will join Fedspeak to direct short-term market moves. Also important will be the inflation numbers from the UK, Canada and Europe.

Also read: Where inflation stands and what to expect, overview of 8 major currencies