Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to show a lack of direction after trending lower over the past few sessions.

A lack of major U.S. economic data may keep some traders on the sidelines ahead of the release of several key reports next week.

While the Commerce Department is due to release its revised reading on wholesale inventories in the month of July, the data typically does not impact the markets.

Next week will see the release of key reports on consumer and producer inflation as well as reports on retail sales, industrial production and consumer sentiment.

The data could have a significant impact on the outlook for interest rates ahead of the Federal Reserve’s next monetary policy meeting on September 19-20.

The Fed is widely expected to leave interest rates unchanged this month, but the data could affect expectations for the November meeting and beyond.

Stocks came under pressure in early trading on Thursday but regained some ground over the course of the session. The major averages all climbed well off their lows of the session, although the tech-heavy Nasdaq continued to post a notable loss.

The Nasdaq slumped 123.64 points or 0.9 percent to 13,748.83 and the S&P 500 fell 14.34 points or 0.3 percent to 4,451.14. Meanwhile, the narrower Dow climbed into positive territory and ended the day up 57.54 points or 0.2 percent at 34,500.73.

The early weakness on Wall Street partly reflected ongoing concerns about the outlook for interest rates following recent economic data.

A report released by the Institute for Supply Management on Wednesday unexpectedly showed faster service sector growth as well as an acceleration in price growth in the sector.

Adding to the interest rate concerns, the Labor Department released a report this morning showing an unexpected decrease in first-time claims for U.S. unemployment benefits in the week ended September 2nd.

The report said initial jobless claims fell to 216,000, a decrease of 13,000 from the previous week’s revised level of 229,000.

Economists had expected jobless claims to rise to 234,000 from the 228,000 originally reported for the previous week.

Jobless claims decreased for the fourth consecutive week, falling to their lowest level since a matching figure in the week ended February 11th.

“The claims data are a reminder that labor market conditions may be cooling, but the labor market is still tight,” said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, “The claims figures don’t change our view for the Fed to keep policy steady at its meeting later this month, but more moderation in job growth will be needed to keep rate hikes permanently off the table.”

While the Fed is still widely expected to leave interest rates unchanged at its next meeting later this month, CME Group’s FedWatch Tool indicates a 43.4 percent chance of another rate hike in November.

Selling pressure waned over the course of the session, however, with some traders believing recent weakness has been overdone.

Nonetheless, a steep drop by shares of Apple (AAPL) continued to weigh on the Nasdaq, with the tech giant tumbling by 2.9 percent on the day.

The slump by Apple came after a report from Bloomberg News said China plans to expand a ban on the use of iPhones in sensitive departments to government-backed agencies and state companies.

Computer hardware stocks saw substantial weakness on the day, resulting in a 3.0 percent nosedive by the NYSE Arca Computer Hardware Index.

Significant weakness was also visible among semiconductor stocks, as reflected by the 2.0 percent slump by the Philadelphia Semiconductor Index.

Steel stocks also saw considerable weakness following weak Chinese trade data, dragging the NYSE Arca Steel Index down by 1.6 percent.

Networking, airline and banking stocks also moved notably lower, while pharmaceutical and utilities stocks have shown strong moves to the upside.

Commodity, Currency Markets

Crude oil futures are climbing $0.69 to $87.56 a barrel after falling $0.67 to $86.87 on Thursday. Meanwhile, after edging down $1.70 to $1,942.50 an ounce in the previous session, gold futures are inching up $5.70 to $1,948.20 an ounce.

On the currency front, the U.S. dollar is trading at 147.35 yen versus the 147.30 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0708 compared to yesterday’s $1.0696.

Asia

Asian stocks fell on Friday amid lingering worries about tighter U.S. Federal Reserve policy and slowing global economic growth.

The U.S. dollar edged lower in Asian trading but was on track to post its eighth weekly gain. Oil prices were muted but headed for another weekly gain on signs of tight supply.

Chinese shares fell slightly, weighted down by the gloomy trade data released the previous day and escalating Sino-U.S. tensions as Beijing eyed broadening the iPhone ban to state firms and agencies.

The benchmark Shanghai Composite Index slipped 0.2 percent to 3,116.72. Hong Kong’s markets were closed due to a tropical storm.

Japanese shares tumbled after government data showed Japan’s GDP grew less than earlier estimated in the last quarter and wages slumped in July, underscoring the fragile state of the country’s economy.

GDP grew by an annualized 4.8 percent in the April-June quarter, below the earlier estimate of 6 percent growth and expectations for a revised 5.5 percent expansion.

The Nikkei 225 Index slumped 1.2 percent to 32,606.84, while the broader Topix Index settled 1.0 percent lower at 2,359.02.

Mobile game and ad company CyberAgent lost 6.8 percent to lead losses. Tech stocks were among the biggest drag, with chip-making equipment giant Tokyo Electron falling 3.8 percent.

Seoul stocks finished marginally lower to extend losses for a fourth consecutive session, with tech and auto stocks pacing the declines. Chipmaker SK Hynix plunged 4.1 percent.

Australian markets ended in the red, dragged down by miners. BHP, Rio Tinto and Fortescue Metals Group dropped 1-2 percent.

The benchmark S&P/ASX 200 Index slipped 0.2 percent to 7,156.70 and lost 1.7 percent for the week, marking its biggest weekly loss since August 18. The broader All Ordinaries Index settled 0.2 percent lower at 7,358.10.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index ended down 0.7 percent at 11,344.11.

Europe

European stocks are turning in a mixed performance on Friday amid concerns over increasing Sino-U.S. tensions, slowing global growth and uncertainty over the path of U.S. monetary policy.

On a light day on the economic front, data showed German inflation slowed marginally in August as estimated, but the rate remained elevated due to the increases in energy and food prices.

Consumer price inflation slowed to 6.1 percent in August from 6.2 percent in July, according to final data from Destatis. The statistical office confirmed the provisional estimate published on August 30.

Separate data out of France revealed that French industrial output rebounded in July, increasing by 0.8 percent month-on-month following a 0.9 percent decrease in June.

While the German DAX Index is down by 0.2 percent, the U.K.’s FTSE 100 Index is just above the unchanged line and the French CAC 40 Index is up by 0.2 percent.

British property developer and house-builder Berkeley Group Holdings has moved to the downside despite reaffirming its earnings guidance.

Capgemini SE, an IT and consulting company, is marginally lower in Paris after it signed an agreement to acquire the Financial Crime Compliance or FCC division of Exiger, a software as a service firm.

Casino has also fallen. Euronext said the debt-ridden French supermarket retailer will be excluded from Paris’ SBF-120 equity index of major companies.

Meanwhile, Saipem has risen after the Italian energy services group clinched two new offshore contracts in Ivory Coast and Italy worth a total of around €850 million ($910 million).

Restaurant Group has also jumped after Chairman, Ken Hanna announced his decision not to seek re-election at the next AGM during 2024 due to personal reasons.

Computer services provider Computacenter has also soared. The corporate and public sector technology provider reported “extraordinary growth” in first-half revenue, driven particularly by growth in Technology Sourcing revenue.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on wholesale inventories in the month of July at 10 am ET. Wholesale inventories are expected to edge down by 0.1 percent.

At 3 pm ET, the Federal Reserve is due to release its report on consumer credit in the month of July. Economists expect consumer credit to increase by $16.0 billion.