US pre-open: Stocks to nudge down as Sino-US relations, Turkey remain in focus
US stocks looked set to nudge lower at the open on Friday as investors mulled over the latest developments between the US and China and threats of more sanctions on Turkey.
At 1235 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.1%, while Nasdaq futures were 0.1% lower.
White House economic advisor Larry Kudlow confirmed overnight that the US and China will resume trade talks later this month, but he also cautioned that President Trump is committed to making sure the administration gets a good deal.
"The Chinese government, in its totality, must not underestimate President Trump's toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas, to stop the theft of intellectual property and to stop the forced transfer of technology," Kudlow said in an interview with CNBC. "Those are the asks that we've been making now for quite some time."
Meanwhile, Turkey was still at the forefront of investors' minds after US Treasury Secretary Mnuchin signalled a more hard-line approach, saying that the US could impose more sanctions on the country if President Erdogan refuses the quick release of the American pastor at the heart of the Turkey crisis.
"We put sanctions on several of the Cabinet members," Mnuchin said Thursday during a Cabinet meeting at the White House. "We have more that we’re planning to do if they don’t release him quickly."
CMC Markets analyst Michael Hewson said: "The US doesn’t appear in any mood to relieve the pressure on the Turkish government in securing the release of their pastor, if recent comments from vice President Mike Pence, and Treasury secretary Steve Mnuchin are any guide. President Erdogan may be able to defray some of the risks to the Turkish economy by trying to improving his ties with Germany and Russia, but if the US really wanted to turn the screws it’s unlikely that these countries would be able to do much about it.
"The announcement of a resumption of trade talks between the US and China is also a welcome development, it’s always good to talk and attempt to resolve differences, and the rebound in the yuan has brought markets some breathing space, however there is still a great deal of difference between agreeing to talk, and coming to an agreement. For now it appears an escalation has become less likely, hence yesterday’s rebound in equity markets."
In corporate news, Deere & Co looked set to slump at the open following the release of its third-quarter earnings, while chip makers Nvidia Corp and Applied Materials were likely to be in focus following the release of their earnings on Thursday.
Nordstrom was sharply higher in pre-market trade as the department store chain's second-quarter earnings late on Thursday beat expectations and the company upped its earnings outlook for the year.
Elsewhere, Bristol-Myers said on Friday that the US Food and Drug Administration has approved its Opdivo drug for the treatment of small cell lung cancer.
On the data front, the University of Michigan's consumer sentiment index for August at 1500 BST is expected to print at 98.0, up just a touch from July's 97.9.