US pre-open: Stocks seen touch higher as investors eye Yellen, oil price
US futures suggested stocks on Wall Street would open just a touch higher on Friday amid weaker oil prices and with investors likely reluctant to make bold moves ahead of a speech by Federal Reserve chair Janet Yellen and GDP data.
At 1130 BST, Dow Jones Industrial Average and S&P 500 futures were up 0.1%, while Nasdaq futures nudged 0.2% higher.
At the same time, oil prices were on the back foot after Brent crude breached the $50 a barrel mark on Thursday for the first time since November. West Texas Intermediate was 0.9% lower at $49.04 a barrel and Brent crude was down 1.2% at $49.01.
Yellen is due to give a speech at Harvard at 1530 BST, which investors will be scrutinising for any further clues on the timing of the next Fed rate hike.
“US stocks look set for an equally flat open. Equity investors appear to be cautiously upbeat ahead of a speech from Fed Chair Yellen at Harvard University and US GDP data, both of which are likely to impact the expected timing of any US rate rise,” said CMC Markets’ Jasper Lawler.
“Yellen’s speech is likely to be a lot more nuanced than other Fed officials and may not give the outright signal for a rate hike dollar-bulls are looking for, which is probably a positive for equities.”
Meanwhile, Societe Generale expects there to be little emphasis on the monetary policy outlook at the event.
“The appearance to look forward to will be the Chair’s speech in Philadelphia on June 6, the Monday following the May employment report and a day before entering the blackout period for the upcoming FOMC meeting,” the French bank said.
On the data front, the second release of first-quarter US GDP is due at 1330 BST.
SocGen said it expects it to come in a little better than the advance reading of 0.5%, at 0.7%. Consensus has pencilled in a rise of 0.9%. “Positive upward revisions to consumption should be behind the boost, though weighed down by downward revisions to business investment,” it said.
Elsewhere, market participants were digesting comments out of the Group of Seven meeting in Japan, where political leaders cautioned about the rising risks to the global economy.
In corporate news, Ulta Salon Cosmetics & Fragrance pushed sharply higher in pre-market trade after releasing better-than-expected first-quarter results.
Valeant Pharmaceuticals was also on the front foot after saying it had rejected a takeover approach from Takeda Pharmaceutical and TPG.