US pre-open: Stocks seen slightly weaker as Trump policies digested
US futures pointed to a slightly weaker open on Wall Street as investors digested President Trump’s latest policy decisions and looked ahead to a busy week that includes a Federal Reserve rate decision and non-farm payrolls.
At midday, Dow Jones Industrial Average and S&P 500 futures were down 0.2% and 0.3%, respectively, while Nasdaq futures were off 0.4%. Meanwhile, West Texas Intermediate was up 0.2% to $53.30 a barrel and Brent crude was flat at $55.50.
On Friday, Trump put a 120-day hold on allowing refugees into the country, an indefinite ban on any refugees from Syria and a 90-day ban on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. The ban also applies to anyone with dual nationality including any of those countries.
Remo Fritschi, institutional sales manager at ADS Securities, said: “Wall Street is looking at a softer start to the week as questions begin to mount over just how damaging the new US immigration policy will be to a number of multinational businesses. Sweeping bans on admission to the country from a number of nations risks undermining the globalisation agenda that has helped pump valuations in a range of US-listed stocks over the last few years, whilst the prospect of similar restrictions being applied to US citizens could also hamper overseas trade initiatives. With Wall Street valuations having been looking so inflated, there’s certainly profit to be booked and this could well be the catalyst.
“Today’s earnings data is relatively low key, but the focus will be on Apple tomorrow to see if they can plot a return to revenue growth, whilst in terms of economic data we have the PCE deflator. As the Fed’s preferred measure of inflation, anything that looks a bit too hot here could fuel speculation about just how long the Fed can leave that first rate hike and a more hawkish stance here again stands to weigh further on stocks.”
On the corporate front, Alphabet’s Google, Facebook and Microsoft were among the companies who criticised Trump’s temporary ban on immigration.
Although there are no major earnings due on Monday, Apple is slated to report on Tuesday, with Facebook numbers on Wednesday and Amazon the day after.
US personal consumption expenditure is at 1330 GMT, while pending home sales figures are at 1500 GMT. The two-day Fed policy meeting kicks off on Tuesday, with the rate announcement on Wednesday, while the all-important non-farm payrolls report is due on Friday.