Dow Futures Rise 120 Pts; Michigan Sentiment Index in Focus

© Reuters

By Peter Nurse

AiVIF.com -- U.S. stocks are seen opening higher Friday, ending the week on a confident note after positive inflation news while investors digest more corporate earnings ahead of important consumer sentiment data.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 120 points or 0.4%, S&P 500 Futures traded 17 points or 0.4% higher, and Nasdaq 100 Futures climbed 60 points or 0.5%.

All three main indices on Wall Street are on course to end the week higher, helped by data showing U.S. producer prices unexpectedly fell in July while consumer prices came in unchanged, suggesting that inflation pressures in the U.S. were easing.

This data raised expectations that the Federal Reserve will dial back its interest rate hikes soon enough to keep the U.S. economy out of a recession.

This has prompted investors to rush back into stocks, with global equity funds pulling in $7.1 billion in the week through Aug. 10, according to Bank of America, citing EPFR Global data.

Investors will look later in the session for signs the receding inflation is boosting consumers’ confidence, with the Michigan Consumer Sentiment Index expected, at 10:00 ET (14:00 GMT), to have improved further in August, to 52.5, after plummeting to a record low of 50 in June before bouncing to 51.5 in July.

In corporate news, Rivian (NASDAQ:RIVN) will be in the spotlight after the electric vehicle maker reported better-than-expected second quarter results after the close Thursday, but also forecast deeper losses for the year as ongoing supply-chain issues continue to hold back production.

The likes of Illumina (NASDAQ:ILMN) and Olo (NYSE:OLO) will also be in focus, with both stocks trading sharply lower premarket after releasing disappointing results late Thursday.

Oil prices weakened Friday, weighed by the expectation that Russia’s pipeline operator Transneft is set to shortly resume oil shipments to three countries in central Europe.

Transneft was quoted by Russian newswires as saying that its payment of transit fees had been accepted by a European bank, apparently removing the bureaucratic obstacle that had led to shipments being stopped on August 4.

Despite these losses, the market is still heading for its biggest weekly gain since April, with both benchmarks currently over 4% higher.

The International Energy Agency and the Organization of Petroleum Exporting Countries provided differing demand views in their monthly market reports on Thursday, with the former raising its forecast for demand growth in 2022 due to gas-to-oil switching while the latter cut its forecast, citing slowing world growth.

Baker Hughes’ rig count and the CFTC’s weekly positioning data round off the week.

By 07:00 ET, U.S. crude futures traded 1.3% lower at $93.12 a barrel, while the Brent contract fell 0.9% to $98.75.

Additionally, gold futures traded 0.2% lower at $1,802.90/oz, while EUR/USD traded 0.3% lower at 1.0290.