US pre-open: Stocks seen flat ahead of CPI, housing starts

US futures pointed to a broadly flat open on Wall Street, with investors likely to pause for breath after the main indices closed at record highs in the previous session.

At 1130 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were down 0.1%.

At the same time, oil prices reversed earlier losses to trade a little higher, with West Texas Intermediate up 0.4% to $45.94 a barrel and Brent crude 0.3% firmer at $48.50.

David Morrison, senior market strategist at SpreadCo, said: “There’s been a softer tone to European equities this morning and that’s been reflected in pre-market US stock index futures. The dollar sold off sharply overnight and that weakness has helped to crimp investor risk appetite.

“The USDJPY has pulled back towards 100.00 and there’s speculation that a significant break below here could trigger unilateral intervention from Japanese policymakers in an attempt to curb the yen’s rally.”

Morrison said US investors will be keeping a close eye on Tuesday’s data releases, which include CPI.

“Last Friday’s disappointing retail sales number has helped to reduce the likelihood of a September rate hike from the Fed and a weak inflation number today should also keep the downside pressure on the greenback.”

On the corporate front, Home Depot was a touch higher in pre-market trade after the retailer’s earnings and revenue for the second quarter came in more or less in line with analysts’ expectations.

Dicks Sporting Goods and TJX Cos are slated to report before the open, with earnings from Urban Outfitters due after the close.

Apple shares could be in focus after regulatory filings on Tuesday showed that Warren Buffett’s Berkshire Hathaway upped its stake in the technology giant.

On the macroeconomic calendar, housing starts and the consumer price index are at 1330 BST, while industrial production figures are at 1415 BST.

Societe Generale expects the headline CPI to have been flat in July month-on-month, which it said would lower the annual rate to 0.8% from 1%. Meanwhile, it expects housing starts to have retrenched in July after June’s outperformance.

“Housing starts posted a surprising increase in June, rising by nearly 5.0% to 1.189m units (annualised), a four-month high,” said SocGen. “The result was unexpected because building permits had essentially been flat in the prior three months combined, signalling little change in groundbreaking activity. Given that starts outperformed in June, and the fact that the NAHB’s Homebuilder index slipped by a point to 59, we expect that starts retrenched somewhat in July.”