US pre-open: Flat open expected with trade tensions and monetary policy in focus
By Iain Gilbert
Date: Tuesday 20 Aug 2019
(Sharecast News) - Wall Street futures were pointing to a flat session ahead of the bell with market participants still focussed on the state of US-China relations and the outlook for monetary policy.
As of 1225 BST, Dow futures were up 0.01%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.03% and 0.07% firmer, respectively.
Stocks finished in the green on Monday, as investors reacted to news from the weekend that the Commerce Department would grant Chinese telco giant Huawei a further 90-day reprieve from a prohibition on US companies trading with it.
But tensions with China were set to remain a major focal point of Tuesday's session after Donald Trump said he had no desire to work with Huawei despite the Commerce Department granting the reprieve.
In parallel, the outlook for further easing by Federal Reserve was front and centre on investors' minds ahead of the release of the meeting minutes on Wednesday and after Trump called on the Fed, on Monday, to cut rates by at least 100 basis points.
And at the end of the week, Fed chair Jerome Powell was set to deliver the keynote speech at the Jackson Hole central banking symposium.
Oanda's Craig Elam said: "Once again we're in a situation whereby the week hangs on what Jerome Powell says about interest rates and whether he can live up to the huge expectations set by the market.
"Given his reluctance in the past and the current positioning, I feel the market has set itself up for disappointment but I guess we'll see."
The Federal Open Market Committee was next set to meet to decide on policy on 17-18 September, when another 25 basis point reduction in the target range for the Fed funds rate was widely expected.
And more recently, some analysts had begun to hold out the hope that the FOMC might slash the Fed funds rate by a bigger than expected 50bp.
In terms of data, the Federal Reserve Bank of Philadelphia's non-manufacturing numbers will be released at 1330 BST, while on the corporate front, Home Depot and Medtronic will post earnings throughout the day.
Fed chair for banking supervision, Randal Quarles, was due to deliver a speech at 1700 BST. On Monday night, in an interview on Bloomberg TV, Boston Fed chief Eric Rosengren had made the case for no more rate cuts at least for now.
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