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US pre-open: Stocks seen touch higher as politics take a back seat

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US pre-open: Stocks seen touch higher as politics take a back seat

Fri, 19 May 2017
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US pre-open: Stocks seen touch higher as politics take a back seat

(ShareCast News) - US futures pointed to a firmer start on Wall Street as stocks got back on track following a mid-week, Trump-inspired selloff.
At 1125 BST, Dow Jones Industrial Average futures were up 0.1%, while S&P 500 and Nasdaq futures were 0.2% higher. Meanwhile, oil prices advanced amid growing optimism ahead of next week's OPEC meeting. West Texas Intermediate and Brent crude were up 0.8% to $52.94 a barrel and $49.75, respectively.

Stocks sold off on Wednesday amid worries that President Trump could be impeached, after it emerged that he had tried to stop former Federal Bureau of Investigation director James Comey from investigating former National Security Adviser Michael Flynn's ties with Russia.

Craig Erlam, senior market analyst at Oanda, said: "Wednesday's selloff in equity markets got many people worried about whether the political circus in the US was finally starting to take its toll on investor appetite at the near-record levels. What we've seen since though would clearly suggest otherwise and instead indicate that the moves two days ago were nothing more than a combination of the usual Trump distraction combined with technical levels giving way.

"The distraction is obviously undesirable, especially if it develops into anything more, but as it is investors appear relatively confident that it will pass, leaving the administration to focus on the policies that are largely responsible for markets being at these levels, tax reform and spending. The last few months has been something of a waiting game for investors as we await further news on taxes and fiscal stimulus, leaving the S&P and Dow bouncing around between 2,320 and 2,400, and 20,400 and 21,170, respectively. Only a break below here would suggest to me that investors are losing confidence."

In corporate news, Deere & Co, Campbell Soup and Foot Locker were among the companies slated to report earnings before the open.

Elsewhere, Gap was likely to be in focus after it released solid first-quarter earnings late on Thursday, while Applied Materials was higher in pre-market trade after better-than-expected quarterly results.

There are no major US data releases due, but investors will eye a speech by St Louis Fed President James Bullard at Washington University at 1415 BST.