US pre-open: Futures inch higher as bond yields slide

(Sharecast News) - Stocks futures were pointing to a positive start in New York on Tuesday as bond yields kept retreating from their recent highs. Markets across Asia and Europe were rising strongly, driving US futures higher, with the Dow, S&P 500 and Nasdaq all up 0.2% in pre-market trade.

While the escalating conflict between Israel and Palestine continues to weigh on investors' minds, with crude prices broadly flat after a huge 4%-plus surge on Monday, comments from two Federal Reserve policymakers seems to be driving market sentiment for the moment.

Scheduled speeches from Fed vice chair Philip Jefferson and Dallas Fed president Lorie Logan on Monday afternoon both highlighted how the recent spike in Treasury yields may have altered their outlook since the last policy meeting. They both suggested that yields might be doing enough to keep financial conditions tight for now, raising hopes that the central bank may hold off from raising rates for now.

The yield on a 10-year US Treasury note was down 14.1 basis points at 4.663% ahead of the opening bell on Wall Street, after coming close to the 4.9% level last week. Bond markets were closed on Monday for Columbus Day and Indigenous Peoples Day.

No major economic data was scheduled for release during Tuesday's session, though speeches from Fed members Christopher Waller, Neel Kashkari and Mary Daly will be closely watched to see if they are aligned with recent comments.

The rest of the week - in terms of US economic indicators at least - will get busier, with both PPI and CPI numbers expected, along with minutes from the latest Federal Open Market Committee meeting.

In other news, the IMF maintained its forecasts for global GDP growth of 3% in 2023, slowing from the 3.5% expansion seen last year. Next year's growth forecasts, however, was reduced by 0.1 percentage points (pp) to 2.9%.

"The global economy is limping along, not sprinting," the IMG said in its latest World Economic Outlook. Nevertheless, expectations for US growth in 2023 and 2024 were lifted by 0.3pp and 0.5pp, respectively, to 2.1% and 1.5%.

In stock movements, PepsiCo futures were rising pre-market after the drinks giant beat forecasts with its third-quarter results and impressed with the market with guidance for 10% organic revenue growth this year.

Oil stocks were flat ahead of the opening bell after some strong gains the previous session as the price of crude held stable. ExxonMobil, EOG Resources and ConocoPhillips were trading more or less unchanged.