Wall Street to make mixed start ahead of inflation data

The main indices on Wall Street are set for a mixed start ahead of US inflation data today. Spread betting quotes point to the S&P 500 opening barely a point higher at 4,386 and the tech-heavy Nasdaq 100 starting 51 points to the good at 14,929 but the Dow Jones Industrial Average is seen drooping 25 points to 34,971. The Nasdaq is probably outperforming because of a report from Associated Press that the European Union has put on hold its plans to introduce a digital tax on tax-dodging multinational companies operating in the ethersphere. All eyes will be on the US consumer price index (CPI) due out later. “Analyst expectations are centred around 4.9% on the headline CPI, which would be a touch weaker than 5.0% from the previous month. In terms of core CPI, they expect a 4.0% reading – if correct, this would be up from 3.8% previously and the highest reading since 1991. On a month-on-month basis, CPI is seen rising 0.5% and 0.4% for the core print,” said Fawad Razaqzada at ThinkMarkets. “Expect the dollar and buck-denominated metals to move sharply on the back of today’s CPI data. If CPI is hotter than expected, it could revive taper talks again, sending the USD/JPY etc higher and potentially halting the Wall Street rally,” the analyst suggested. Already release is the NFIB headline index of small business activity and sentiment, which rose to 102.5 in June from 99.6 in May, beating the consensus forecast of 99.5. “The index was lifted by increases in most of the components, led by economic expectations, which jumped 14 points. This is the most volatile - by far - of the 10 equally-weighted headline components, and the June jump reverses the inexplicable plunge reported in May,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “Sales and earnings expectations also rose in June, along with inventory expectations, hiring plans and employee compensation. Note that the labour market numbers are not new today; they were released last week as part of the NFIB jobs report, as usual. Their message is clear; businesses can’t find all the people they want, and compensation costs are rising strongly,” he added. Four things to watch for on Tuesday: Aside from the major bank earnings today, other companies in the diary include industrial supplies group Fastenal Co (NASDAQ:FAST), Slim Jim and Chef Boyardee maker ConAgra Brands Inc (NYSE:CAG) and medical firm Healthcare Services Group Inc (NASDAQ:HCSG) Shares in Boeing Co (NYSE:BA) will be in focus after the firm cut production guidance for its 787 aircraft amid new structural defects with the plane Speaking of aircraft, carrier United Airlines Holdings Inc (NASDAQ:UAL) may also draw attention after it agreed to buy 100 19-seat ES-19 electric planes from Swedish firm Heart Aerospace On the macro front, aside from the US inflation data, traders may be interested in the monthly US budget statement