US pre-open: Wall Street set to dip despite more 'dovish' Fed talk
By Alexander Bueso
Date: Friday 21 Jun 2019
(Sharecast News) - Stocks on Wall Street looked primed for a dip on Friday as investors played it safe following the recent run-up in share prices and ahead of the 28-29 June G-20 leaders summit in Osaka, Japan, where the US President and his Chinese counterpart were due to meet and despite dovish remarks from at least two top Federal Reserve officials.
On the more optimistic side of opinions in the market however, strategists at Bank of America-Merrill Lynch told clients: "Trump prefers to be "Jobs President" not "Tariff President"; steel first industry to receive tariff protection; US Steel factory closure, slump in Philly Fed, rising joblesss claimsin battleground state Pennsylvania suggests G20 trade war escalation unlikely."
As of 1355 BST, futures on the Dow Jones Industrials were pointing towards a dip of 46.0 points to 26,728.0, alongside a decline of 6.75 points for the S&P 500 to 2,953.25 while the Nasdaq-100 was being called to start the day 29.0 points lower at 7,743.75.
In parallel, August gold futures on COMEX were 0.25% higher at $1,400.40/oz. and various analysts could be heard pointing out to clients the possibility for further gains, including those at Citi, who spied a possible move towards $1,500.9-1,600.0/oz. for over the next 12 months.
Related to the above, Oanda sernior market analyst Craig Erlam said: "If this week has shown anything, it's that we're once again very reliant on central banks for returns.
"US stocks are back at record highs and we very much have central banks to thank for that. The markets had already been on a decent run from various comments in recent weeks but Draghi put the icing to the cake on Tuesday and Powell added the sprinkles on Wednesday."
And there was more dovish Fed talk to be heard at the end of the week, with US central bank vice-chairman Richard Clarida telling Bloomberg that rate-setters would act "as appropriate to sustain the expansion" and Atlanta Fed chief James Bullard saying that cutting rates now would help the country "navigate" an increasingly risky enviroment.
To take note of, Friday was set to be quadruple witching day on Wall Street, with futures and options for individual stocks and indices all set to expire.
On the corporate side of things, stock in CarMax was 4% higher in premarket trades after the second-hand car retailer beat analysts' estimates for its fiscal first quarter profits and sales.
On the economic calendar for Friday, at 1445 BST IHS Markit would publish its manufacturing sector Purchasing Managers' Index referencing the month of May, followed by figures on new home sales for that same month from the Commerce Department at 1500 BST.
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