US pre-open: Stocks seen touch lower ahead of payrolls

US futures pointed to a marginally weaker open on Wall Street, with investors likely reluctant to make any big bets either way ahead of the nonfarm payrolls report, while a ‘flash crash’ in the pound added to jitters.

At 1100 BST, Dow Jones Industrial Average futures were off 0.1%, while S&P 500 and Nasdaq futures were down 0.2%.

Oil prices were a little firmer, keeping their head above the $50 a barrel mark following reports that some OPEC members and Russia will meet next week to talk about Russia’s involvement in the joint production cut. West Texas Intermediate was up 0.3% to $50.59 a barrel and Brent crude was 0.2% higher at $52.61.

Meanwhile, the pound was down 2.4% against the dollar at $1.2315, having plunged to below $1.20 in Asian trade. Sterling slid as much as 6% to hit its lowest level since 1985 in Asian trade, with market participants speculating that it could have been the result of a faulty algorithm. The plunge coincided with comments by French president Francois Holland, who said the EU should take a tough stance with the UK during exit talks.

Paul Webb, chief executive officer at ADS Securities London, said: “Once again Wall Street is looking at a broadly unchanged start to Friday’s session, although this comes with the significant caveat that between now and the opening bell, we’ve still got those non-farm payrolls to contend with. In addition to this, we can expect the wage data to be under increased scrutiny as the Federal Reserve look to jump on inflationary pressures early and we still can’t ignore the fact that if the numbers end up looking too hot, then a rate hike before the presidential elections remains a real possibility.

“Aside from this, economic data is thin on the ground in the next couple of house. Any further insights as to what caused that big shake out for sterling overnight will be closely followed, although it would be unlikely to have any meaningful impact on US equities. For now it’s all about the employment situation and just how much this yields for the Fed’s rate hawks, with any further conviction towards a hike likely to rattle stocks not just in the US but further afield too.”

In corporate news, Honeywell International was likely to be in focus after the company cut its third-quarter outlook on Thursday.

Clothing retailer Gap was sharply higher in pre-market trade despite saying late on Thursday that same-store sales in September fell 2% to $1.43bn.

On the data front, the nonfarm payrolls report and the unemployment rate are at 1330 BST, while wholesale inventories are at 1500 BST. The payrolls will be closely watched as investors try to gauge the timing of a rate hike by the Federal Reserve.

Deutsche Bank said it would take an “extraordinarily high” number along with the other employment components being very strong for a November rate hike to be in play, with the market currently pricing in a probability of just 24%.