US pre-open: Banks in focus as stocks set to rise
Stocks on Wall Street were set to open higher on Friday, with banks in focus after most of the 35 US institutions passed the Federal Reserve's annual stress tests.
At 1250 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.4%.
Sentiment got a boost after the Fed gave the green light to 32 of the 35 largest US banks to lift their dividends and buy back shares.
The four biggest banks - JPMorgan, Bank of America, Wells Fargo and Citigroup - said they will pay out more than $110bn through dividends and share buybacks.
Markets in the US were also likely to track gains in Europe, where investors welcomed news that EU leaders at the summit in Brussels reached a deal on migration in the early hours of Friday, after more than 10 hours of negotiations.
As part of the deal, which is voluntary, new migrant centres would be set up in EU countries to process migrants and determine those who are genuine refugees, with those deemed "irregular" returned. The leaders also agreed to tighten their external border and increase financing for Turkey, Morocco and North African states to prevent migration to Europe.
The agreement was widely seen as relieving pressure on German Chancellor Angela Merkel, whose coalition was teetering on the brink of collapse over the country's role in the refugee crisis.
Oanda analyst Craig Erlam said: "While something like this would not necessarily be a market moving event, the fragile political environment in the euro area right now means no agreement could have had serious and worrying consequences. Not only could a failure to reach an agreement have increased the divisions that are growing between Italy’s new populist government and others, it could have led to the collapse of the German coalition government.
"This all sounds very dramatic but immigration has been a very divisive issue for Europe for some time now and has contributed to the rise of populist parties, many of which don’t share the same affinity for the single currency as the current establishments. Angela Merkel has also long been the only strong and stabilising factor in the region and the collapse of her government over the issue could be seen as a very worrying sign of things to come."
Investors were also likely to be digesting a report suggesting that US President Tump wants to withdraw from the World Trade Organization. According to Axios, Trump has told several top White House officials that he wants to withdraw the US from the WTO.
One source told Axios: "He’s [threatened to withdraw] 100 times. It would totally [screw] us as a country."
In corporate news, Nike was set to surge at the open after its quarterly sales and earnings late on Thursday beat analysts' expectations, while housebuilder KB Home was stronger in pre-market trade after better-than-expected quarterly numbers.
Elsewhere, Lannett was likely to be in focus after saying it expects to incur around $5m in costs from the restructuring of its Cody Laboratories unit and to cut around 50 jobs there.
On the data front, the PCE index is at 1330 BST, while the Chicago purchasing managers' index is at 1445 BST and Michigan consumer sentiment is at 1500 BST.