US pre-open: Stocks to recover after recent losses; OPEC eyed
US futures pointed to an upbeat session on Wall Street on Friday as investors set aside their concerns about the trade spat between the US and China following eight sessions of losses, with the OPEC meeting in Vienna in focus.
At 1125 BST, Dow Jones Industrial Average and S&P 500 futures were up 0.4%, while Nasdaq futures were 0.4% firmer, breaking a losing streak prompted by escalating tensions between the US and China after President Trump announced at the start of the week that he had asked the US Trade Representative to identify $200bn worth of Chinese goods for an additional 10% tariff. This in turn prompted a response from Beijing, which said it would impose its own set of measures in retaliation.
Oil prices were in focus amid expectations that OPEC will end its production ceiling and lift supply capacity by between 500,000 and 1m barrels a day.
IG analyst Joshua Mahony said: "Volatility has been the name of the game for oil prices, with markets attempting to second guess what decision the cartel will reach after all is said and done.
"There is no doubt that markets are already pricing in some form of production increase, and thus the market reaction is likely to be dictated by quite how much the group will raise output by. With sanctions shrinking output, Iran certainly has reason to push for higher prices. However, in the past it has always been the case that whatever the Saudis want, they get."
West Texas Intermediate was up 1.1% to $66.28 a barrel and Brent crude was 1.2% firmer at $73.94.
In addition, the EU’s tariffs on £2.4bn worth of US goods kick in on Friday. Mahony said: "While initial threats from Donald Trump were largely disregarded, we are now seeing a clear sign that trade wars are moving into a new stage, with today’s implementation unlikely to be the end of an increasingly fraught relationship between the US and their traditional allies."
In corporate news, software company Red Hat fell in pre-market trade after it issued weaker-than-expected guidance for the second quarter late on Thursday. Still, CMC Markets analyst David Madden said the stock has been in a solid upward trend since February 2016 so the pullback might entice new buyers.
Elsewhere, used car seller CarMax and Blackberry were slated to report earnings before the opening bell.
On the data front, Markit's manufacturing and services PMIs are at 1445 BST. The manufacturing PMI is expected to have ticked up to 56.5 in June from 56.4 in May, while the services index is forecast to have nudged down to 56.4 from 56.8.