US pre-open: Stocks seen slightly lower, with Deutsche still in focus

US futures pointed to negative open on Wall Street as worries about Deutsche Bank and the broader financial sector continued to weigh on investors’ minds, although losses looked set to be fairly limited after Thursday’s decline.

At 1140 BST, Dow Jones Industrial Average and Nasdaq futures were down 0.3%, while S&P 500 futures were 0.2% weaker.

Meanwhile, oil prices retreated amid doubts about the OPEC deal agreed on Wednesday and as investors booked some profits. West Texas Intermediate was down 1.2% at $47.26 a barrel and Brent crude was off 1.6% at $48.44.

Jamieson Blake, retail sales manager at ADS Securities London, said: “There are mounting fears over the state of Deutsche Bank and with this will come concern over the risk of contagion. The VIX is spiking higher too, but at least for now the market seems content that the slide we saw for US equities yesterday has been an appropriate adjustment.

“We have a flurry of US economic releases due this afternoon including Michigan confidence and Personal Consumption Expenditure readings, which are often termed as the Fed’s preferred measure of inflation. As is likely to be repeated right throughout October, investors will be looking to second-guess how the Fed will react to numbers like these and anything too hot could leave the interest rate hawks making a lot more noise.”

Deutsche Bank was under the cosh again following reports late on Thursday that a number of key funds had withdrawn money from the German lender, which currently faces a $14bn fine from the US Department of Justice for mis-selling mortgage-backed securities.

However, the stock pared some losses on reports of a letter sent to the bank’s employees by chief executive John Cryan. It was understood that Cryan said recent media speculation that a group of hedge funds were cutting their exposure to the lender was “causing unjustified concerns” and that the bank has “strong fundamentals”.

Elsewhere, Costco Wholesale Corp was higher in pre-market trade after it reported quarterly profit that beat expectations late on Thursday.

On the macroeconomic calendar, personal income and spending is at 1330 BST, Chicago PMI at 1445 BST and University of Michigan consumer sentiment at 1500 BST.