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Stock index futures were mixed Friday with investors getting the last round of Fed speak before the blackout period.
S&P futures (SPX) +0.1% and Dow futures (DJI) -0.1% were little changed. Nasdaq 100 futures (NDX:IND) +0.4% rose with a post-earnings bounce from Netflix (NFLX) helping.
“While Wall Street sags with the weight of recession fear and Federal Reserve jitters, Netflix’s huge beat on subscriber numbers has injected some much-needed optimism into the mix,” Hargreaves Landsdown’s Sophie Lund-Yates wrote.
Rates are moving higher. The 10-year Treasury yield (US10Y) rose 3 basis points to 3.43% and the 2-year yield (US2Y) rose 5 basis points to 4.17%.
Friday will be the last day for Fed members to get their message out before the February meeting. Philadelphia Fed President Patrick Harker will speak before the bell while Fed Governor Christopher Waller talks this afternoon.
Yesterday, “Federal Reserve Vice-Chair Brainard (a respected economist) implied a slowing of policy rate tightening, but that US rates would stay high for some time,” UBS’ Paul Donovan said. “Similar language about the persistence of high rates is to be expected – as the Fed’s June policy errors trashed forward guidance, markets discount Fed comments.”
“Fiercer language is required to generate a moderate market reaction. As profit-led inflation falls, potentially rapidly, the Fed’s language will have to adjust.”
The economic calendar is light, with December existing home sales out shortly after a start of trading. Economists expect a drop to a pace of 3.96M.