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U.S. stock futures struggle over Trump worries; earnings support

Published 18/08/2017, 11:53
© Reuters.  Wall Street futures trade flat as earnings news balances risk-off sentiment
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Investing.com – Wall Street futures pointed to a flat open on Friday as sentiment struggled to recover from concerns over a Trump administration meltdown and positive earnings helped to support gains as investors looked ahead to a reading on consumer confidence.

The blue-chip Dow futures wavered around the unchanged mark at 6:50AM ET (10:50GMT), the S&P 500 futures inched up 1 point, or 0.04%, while the tech-heavy Nasdaq 100 futures advanced 16 points, or 0.27%.

Turbulence surrounding U.S. President Donald Trump’s administration following the backlash over his statements on the white supremacist rally in Charlottesville.

Market players see the recent political turmoil as an obstacle to Trump being able to follow through on infrastructure spending and tax reforms.

Also weighing on sentiment was a bought of terrorist attacks in Spain that began late Thursday.

In Barcelona, a van rammed into tourists on Thursday evening, killing at least 13 people and injuring 100 others.

Further down the Spanish coast, police took down five suspects in a shootout in Cambrils on Friday in response to what was another planned attack related to the Barcelona incident.

Additionally, an explosion further south in Alcanar was reportedly attributed to an error by terrorists in a bomb-making workshop.

Back in the States, a string of positive earnings after the close supported investor sentiment.

Ross Stores (NASDAQ:ROST) soared more than 10% in pre-market trade Friday after the apparel and home-fashion retailer beat expectations on both the top and bottom line.

Shares in Gap Inc (NYSE:GPS) also jumped more than 5% after the clothing retailer reported a positive quarter and increased its full-year profit forecast.

Applied Materials (NASDAQ:AMAT) support tech stocks with gains of more than 5% as the bellwether for the chip industry beat profit estimates.

As of Thursday’s close, 470 of the S&P 500 firms had reported earnings with 74% beating profit estimates and 70% topping sales, according to The Earnings Scout.

On Friday, Foot Locker (NYSE:FL), Deere & Company (NYSE:DE) and Estee Lauder (NYSE:EL) were among firms scheduled to report before the opening bell.

On the economic front, investors will focus on the preliminary reading for August of the University of Michigan’s consumer sentiment index at 10:00AM ET (14:00GMT).

Oil bounced off three-week lows on Friday but remained on track for weekly losses of more than 3% as investors attempted to balance a broad-based sell off with signs that crude supplies may be gradually tightening.

On the bearish side, market players have recently registered OPEC’s difficulties in holding to their production cut agreement as those members exempt from the reduction accord such as Libya or Nigeria continue to increase output. Recent data on overall compliance hit its lowest percentage this year.

On the other hand, despite a 13% jump in production since mid-2016 to 9.5 million bpd, the country's commercial crude inventories have fallen 13% from their March records to below 2016 levels, according to Reuters.

Markets are also keeping a close eye on the ramp up in U.S. shale production.

Baker Hughes will its most recent weekly rig count data later on Friday.

U.S. crude futures gained 0.23% to $47.20 by 6:52AM ET (10:52GMT), while Brent oil rose 0.16% to $51.11.

Elsewhere, European shares were lower on Friday as airlines and other travel industry stocks were hit by worries over the terrorist attacks in Spain.

Earlier, stock markets in Asia ended mostly lower on Friday as equities followed the risk-off scenario set in motion by Wall Street. The Nikkei closed with losses of 1.2%.

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