Having traded at lows for the week during yesterday’s session, futures suggest that the Dow Jones industrial Average will start Friday’s session on the front foot. Optimism over a meeting that’s due to take place between the US and Chinese leaders on the fringes of the G20 summit in Japan this weekend appears to be responsible for driving the gains, although reports suggest there may still be a considerable way to go when it comes to finding compromise.
A step in the right direction would however have the potential to bolster commodity prices and with it take major indices higher, too.
The key economic release to watch for today will be the PCE Deflator, which is the Fed’s preferred measure of inflation. With the Central Bank playing it cool when it comes to policy easing, this number may well surprise on the upside, although failure to see something close to the 2% target being delivered has the potential to add to the calls for a more dovish path to be taken.
The revised University of Michigan consumer sentiment data due after the opening bell also has the potential to provide some further evidence over the need for a rate cut. Again, anything portraying a dovish bias could drive stocks higher.
Ahead of the open, the market is calling the Dow to open up 92 at 26619 and the S&P 500 up 7 at 2932.