By Peter Nurse
Investing.com -- U.S. stocks are seen opening with small gains Friday, ahead of the release of more major bank quarterly earnings as well as key retail sales data.
At 7 AM ET (1100 GMT), the Dow Futures contract was up 115 points or 0.4%, S&P 500 Futures traded 11 points or 0.3% higher, and Nasdaq 100 Futures climbed 30 points or 0.3%.
The main indices on Wall Street managed to retrace most of their early losses to close only marginally lower Thursday, but a disappointing start to second quarter earnings from a couple of the country’s largest banks cast a shadow over the outlook for the economy.
Both JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) reported weaker than expected second quarter earnings, with the former saying it would temporarily pause share buybacks as well as setting aside more money than expected for potential loan losses, raising concerns about the strength of the U.S. consumer.
Wells Fargo (NYSE:WFC) also reported a fall in second quarter profit earlier Friday, setting aside more money to cover loans that could sour if the economy weakens drastically. Citigroup (NYSE:C) is also scheduled to report during this session, and investors will be looking to see if this lender matches the weakness of its peers, setting a trend.
Helping the tone late on Thursday were comments from a couple of well-known Fed hawks, Christopher Waller and James Bullard, supporting raising rates by 75 basis points this month and not the full percentage point that the market had begun to factor in after Wednesday’s red-hot inflation report.
The economic data slate Friday includes the June U.S. retail sales release, which is expected to rise 0.8% on the month, while the Michigan consumer sentiment index for July could offer a more pessimistic outlook.
Elsewhere, Pinterest (NYSE:PINS) will be in focus following a Wall Street Journal report that activist investment firm Elliott Management has taken a 9% stake to become the largest investor in the social media platform.
Eyes will also be on Amazon (NASDAQ:AMZN), as the market digests the implications of its Prime Day promotion and its moves this week to settle antitrust charges in the EU.
Oil prices traded higher Friday but still have the chance of ending below $100 a barrel for the first time since early April after weak Chinese growth data raised concerns over a global economic slowdown.
U.S. President Joe Biden will fly to Saudi Arabia later Friday, in an attempt to get his Gulf allies to pump more oil and thus lower prices. However, he might find this difficult to achieve as spare capacity at the majority of the members of the Organization of the Petroleum Exporting Countries is running very low.
The number of U.S. oil rigs, collated by Baker Hughes, and CFTC positioning data conclude the week, as usual.
By 7 AM ET, U.S. crude futures traded 1.9% lower at $97.58 a barrel, while the Brent contract rose 2.2% to $101.28.
Additionally, gold futures fell 0.1% to $1,704.75/oz, while EUR/USD edged 0.4% higher to 1.0057.