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U.S. equity futures edged higher in early Friday trading, while the dollar remained pinned at the highest levels in two years, as investors looked to reverse a recent round of losses on Wall Street amid a broader pullback in global stocks.
The S&P 500 ended lower on Thursday, extending its losing streak to five consecutive sessions, the longest since April, and dragging both the Nasdaq and the Dow Jones Industrial Average into negative territory.
Stronger-than-expected readings on both jobless claims and manufacturing activity triggered more selling in Treasury yields, taking benchmark 10-year notes to 4.551% in overnight trading.
The prospect of a stronger economy and stubborn inflation leading to fewer Federal Reserve rate cuts powered the U.S. dollar index to its highest levels in more than two years, with the greenback tracker last marked 0.29% lower from yesterday’s peak at 109.079.
President-elect Donald Trump will be closely trading the effort to elect Louisiana Republican Mike Johnson as House Speaker for the newly-convened Congress.
Wall Street will look to a broader reading of December manufacturing activity later today from the Institute for Supply Management, as well as the efforts in Washington to elect Louisiana Republican Mike Johnson as House Speaker for the newly-convened Congress.
U.S. equity futures suggest modest opening bell gains for each of the three benchmarks, but intra-day volatility levels suggest markets are likely to swing in-and-out of positive territory for much of the session.
Contracts tied to the S&P 500 suggest a 14 point opening bell gain while those linked to the Dow are priced for an 80 point advance from last night’s close.
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The tech-focused Nasdaq is called 75 points higher with Nvidia (NVDA) , Tesla (TSLA) and Palantir (PLTR) all in positive premarket territory.
U.S. Steel (X) shares, however, slumped more than 8% in premarket following multiple media reports that suggest President Joe Biden will formally block the group’s group’s proposed $14 billion takeover by Japan’s Nippon Steel on national security concerns.
In Europe, the euro sank to a fresh two-year low of 1.0280 against the dollar in overnight trading, while the Stoxx 600 benchmark fell 0.26% in Frankfurt, amid concerns for the near-term growth prospects of the world’s biggest economic bloc.
Overnight in Asia, China stocks extended their longest weekly decline in two years, and their worst start to any year since 2016, on renewed worries that government plans to prop-up the world’s second-largest economy have year to bear fruit.
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Benchmark 10-year government yields fell to a record low below 1.6% while the yuan slipped below the 7.3 mark against the dollar for the first time in more than a year.
Regionally, the MSCI ex-Japan index was marked 0.28% higher into the close of trading while Japan’s Nikkei 225 remained shut for the country’s traditional New Year celebrations.
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