U.S. Futures Edge Higher; Intel and PMI Data in Focus

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U.S. Futures Edge Higher; Intel and PMI Data in Focus
Credit: © Reuters.

By Peter Nurse   

Investing.com - U.S. stocks are seen opening marginally higher Friday, rebounding slightly from the previous session’s sharp losses with investors still wary of the potential for a hike in capital gains tax.

At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 55 points, or 0.2%, S&P 500 Futures traded 10 points, or 0.2%, higher, and Nasdaq 100 Futures climbed 23 points, or 0.2%.

The major U.S. indices all closed just short of 1% lower Thursday, their biggest slide in five weeks, after reports that President Joe Biden is set to propose almost doubling the capital gains tax for those earnings more than $1 million a year, to potentially just short of 40%. 

The news rattled investor sentiment, amid concerns that investors will sell stocks, cashing in before any bill becomes law. That said, there is also a degree of skepticism that the proposal will be able to get through the political process in the form suggested given the likely heated opposition.

The corporate earnings season continues Friday, with companies having for the most part managed to beat Wall Street’s forecasts thus far. Some of the bigger names reporting ahead of the bell on Friday include industrial conglomerate Honeywell (NYSE: HON ), personal-care company Kimberly-Clark (NYSE: KMB ) and oilfield services firm Schlumberger (NYSE: SLB ). All are expected to post lower profit and growth from a year ago.

Intel (NASDAQ: INTC ) is also likely to be in the spotlight after the chip maker’s second-quarter profit forecast fell short of expectations, even as it raised its annual sales outlook, as the company was forced to spend heavily to get its manufacturing operations back on track and catch up to rivals with faster chips.

U.S. economic data due for release Friday, at 9:45 AM ET (14:45 GMT), includes preliminary “flash” readings of manufacturing and services PMI indices for April, which are expected to confirm the ongoing recovery.

Equivalent numbers in Europe, released earlier Friday, showed the recovery from the region’s pandemic-induced economic downturn was much stronger than expected in April.

March new home sales are due 15 minutes later, and consensus calls for 885,000, which would be a significant jump over February's 775,000, but come on the heels of a second straight drop in existing home sales on Thursday.

Oil prices edged higher Friday, boosted by the improving economic conditions in Europe and the U.S., but concerns about the second wave of Covid-19 cases in India, with the world’s third-largest oil importer setting records for daily infections and deaths, kept a cap on the gains.

U.S. crude futures traded 0.5% higher at $61.75 a barrel, while the Brent contract rose 0.2% to $65.56. Both contracts are still heading for losses of just under 2% this week.

The keenly-watched Baker Hughes weekly oil rigs count is due for release later Friday.

Elsewhere, gold futures rose 0.3% to $1,787.35/oz, while EUR/USD traded 0.4% higher at $1.2057.


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