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U.S. stock futures point to pause at record highs, earnings in focus

Published 21/07/2017, 12:02
© Reuters.  Wall Street futures drift lower, Nasdaq set to break 10-day winning streak
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Investing.com – Wall Street futures pointed to a flat to lower open as U.S. stocks appeared set to take another breather at record highs on Friday with the Nasdaq set to break a 10-day winning streak, its best since February 2015, as investors prepared to price in big moves on earnings and brace for the flurry of results coming next week.

The blue-chip Dow futures lost 29 points, or 0.13%, at 6:58AM ET (10:58GMT), the S&P 500 futures slipped 1 point, or 0.05%, while the tech-heavy Nasdaq 100 futures fell 8 points, or 0.13%.

With no major economic reports set for release on Friday, market participants were focused on the continuing flow of quarterly earnings, particularly the results of three Dow Jones components.

Visa Inc (NYSE:V) looked set to lead the blue-chip index higher as shares registered gains of nearly 2% in pre-market trade Friday after the credit card company lifted its earnings forecast as profit beat estimates.

Gains in General Electric (NYSE:GE) were right behind Visa in pre-market trade as the global industrial conglomerate beat on both the top and bottom line despite a 12% decrease in revenue.

Though Microsoft (NASDAQ:MSFT) initially saw shares jump as the computer giant produced late Thursday better-than-expected quarterly profit thanks to its fast-growing cloud business, the stock pared gains and was last only up 0.08%

Outside the Dow and in negative territory, eBay (NASDAQ:EBAY) sank around 4% in pre-market trade Friday as its numbers came out largely in line with expectations and its guidance failed to impress.

Honeywell, Moody's (NYSE:MCO), Huntington Bancshares (NASDAQ:HBAN) or Fifth Third Bancorp (NASDAQ:FITB) were among firms slated to release earnings before the opening bell.

Apart from these results, next week will be the busiest one in the second quarter earnings season.

Outside of company news, investors will also keep a close eye on political developments in Washington after reports that special counsel Robert Mueller is planning to expand investigations into allegations that Russia meddled in the 2016 U.S. presidential election.

Several news agencies suggested that Mueller could delve into U.S. President Donald Trump’s private business, though the U.S. leader expressed his opinion that investigating his personal finances would be crossing a red line.

The recent reports kept continuous downward pressure on the dollar as market players fretted over how the investigations would sidetrack the implementation of Trump’s fiscal and economic policies.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gave up 0.13% to 93.96 by 7:00AM ET (11:00GMT).

Related to the weak dollar, the euro continued to be gain ground against the greenback, hitting its highest level in nearly two years, after European Central Bank (ECB) president Mario Draghi hinted on Thursday that the euro zone monetary authority could begin discussions on tapering stimulus in the fall.

EUR/USD reached 1.1677 on Friday its highest level since August 2015 as markets took Draghi’s comments to mean that the ECB was slowly shifting towards taking a less dovish stance and beginning to consider a removal of policy accommodation.

ECB policymakers now see October as the most likely date to decide on the future of the central bank's asset purchases and consider December, an option flagged by staff, as too late, four sources with direct knowledge of the discussion told Reuters.

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