US pre-open: Stocks to nudge higher ahead of payrolls; banks in focus

US futures pointed to a marginally firmer open on Wall Street, with banking stocks set to lend support, as investors erred on the side of caution ahead of the non-farm payrolls report.

At 1130 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.2%.

Jamieson Blake, retail sales manager at ADS Securities, said: “Futures prices are currently suggesting we’re going to see a relatively quiet start to the day on Wall Street, although there’s the non-farm payrolls release to contend with ahead of the opening bell, and this could readily inject a degree of volatility. Expectations are for a robust print to be seen, something that is backed up by Wednesday’s ADP release, but perhaps more critical will be the average wage data. Any signs that this is creeping higher will push Federal Reserve hawks to seek out another rate hike and this could end up weighing on stocks.

“We also have another policy announcement from the White House to consider and that’s the idea that the Dodd Frank act will be scaled back to some extent. Banks may find some cheer off the back of this in the short term, although it’s the granularity that will be most important here.”

The non-farm payrolls report and the unemployment rate are at 1330 GMT.

Societe Generale expects payrolls to have advanced by around 170,000 in January, led by gains in the education and health sectors.

It said average hourly earnings look set to increase by 0.3% month-on-month in January, implying a minor drop in the year-on-year rate to 2.8%. Overall, labour market conditions should remain tight as the unemployment rate stays put at 4.7%, SocGen said.

On the corporate front, banking stocks JP Morgan Chase & Co and Goldman Sachs were in the black in pre-market trade following a report that Donald Trump’s administration plans to sign an executive action to scale back the 2010 Dodd-Frank financial overhaul.

Earnings are due before the opening bell from Clorox Co and Hershey.

Meanwhile, Amazon was likely to be in focus after it reported disappointing fourth-quarter revenue late on Thursday.

GoPro slumped in pre-market trade after its fourth-quarter revenue late on Thursday missed expectations, while Chipotle Mexican Grill nudged lower after weaker-than-expected quarterly earnings.