U.S. Stocks Likely To Extend Upward Trend In Early Trading

Following the mixed performance seen in the previous session, stocks are likely to move to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 134 points.

The markets may continue to benefit from recent upward momentum on Wall Street, which has helped the major averages show a substantial rebound off their March lows.

The Nasdaq and the S&P 500 have more than offset the sell-off seen in late February and early March, soaring to new record highs.

The Dow has underperformed its counterparts but is also closing in on the record high set in February. The blue chip index is poised to turn positive for 2020 after briefly moving above the unchanged line for the year on Thursday.

Buying interest may also be generated as traders continue to digest Federal Reserve Chair Jerome Powell’s announcement of the central bank’s adoption of “average inflation targeting.”

Powell’s comments were seen as an indication the Fed will leave interest rates at near-zero levels for the foreseeable future even if there is an acceleration in the pace of inflation.

Adding to the positive sentiment, the Commerce Department released a report showing an unexpected increase in personal income in July.

The Commerce Department said personal income rose by 0.4 percent in July after slumping by 1.0 percent in June. The rebound surprised economists, who had expected income to dip by another 0.2 percent.

The report also showed a continued surge in personal spending, which jumped by 1.9 percent in July after spiking by 6.2 percent in June. Economists had expected spending to increase by 1.5 percent.

Just after the start of trading, MNI Indicators is due to release its report on Chicago-area business activity in the month of August.

The Chicago business barometer is expected to inch up to 52.0 in August from 51.9 in July, with a reading above 50 indicating growth.

The University of Michigan is also scheduled to release its revised reading on consumer sentiment in the month of August.

The consumer sentiment index for August is expected to be unrevised from the preliminary reading of 72.8, which was up slightly from 72.5 in July.

Stocks fluctuated over the course of the trading session on Thursday but largely maintained a positive bias. The S&P 500 reached a new record closing high and the Dow ended the day at its best closing level in over six months, although the tech-heavy Nasdaq eventually ended the day in the red.

The Dow climbed 160.35 points or 0.6 percent to 28,492.27 and the S&P 500 rose 5.82 points or 0.2 percent to 3,484.55. Meanwhile, the Nasdaq, which has recently outperformed its counterparts, fell 39.72 points or 0.3 percent to 11,625.34.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while China’s Shanghai Composite Index jumped by 1.6 percent.

Meanwhile, major European markets are showing only modest moves on the day. While the French CAC 40 Index is just above the unchanged line, the U.K.’s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.2 percent.

In commodities trading, crude oil futures are edging down $0.06 to $42.98 a barrel after falling $0.35 to $43.04 a barrel on Thursday. Meanwhile, after tumbling $19.90 to $1,932.60 an ounce in the previous session, gold futures are spiking $31.40 to $1,964 an ounce.

On the currency front, the U.S. dollar is trading at 105.39 yen versus the 106.57 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1900 compared to yesterday’s $1.1822.

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