Pre Stock Market News: Higher Open Expected For US Markets, Oil Down

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Higher open likely for the U.S. markets Friday as key equity gauges were up Friday morning.

At 05:30 a.m. ET, Dow futures indicated a positive open of more than 75 points. Futures on the S&P and Nasdaq indices were fractionally up.

According to reports, Dow may set a new intraday trading record.

In the markets, the focus moved to U.S-China trade developments as the top economies prepared for talks in early October.

President Donald Trump welcomed China’s renewed purchases of American farm goods. Trump’s statement that he is not against an interim trade deal with China although a full deal is the first choice raised new hopes on the China trade war front.

The stock markets are expected to react to the European Central Bank’s (ECB) massive bond-buying program announced Thursday to stimulate the ailing eurozone economy.

The ECB also cut its main deposit rate by 10 basis points to -0.5 percent in line with market expectations.

On the data side, Friday will see the release of retail sales for August and import prices for August at around 8:30 a.m. ET.

Data on consumer sentiment for September and business inventories for July will follow later in the session.

Oil price falls

The oil price fell to around $60 a barrel on Friday as concerns mounted on a slowdown in the global economy.

Benchmark Brent crude fell 25 cents at $60.13 a barrel by 0830 GMT, while U.S. West Texas Intermediate was up 5 cents at $55.14.

Worries about depleting oil demand, as evident in the forecasts of the Organization of the Petroleum Exporting Countries and the International Energy Agency (IEA) pointed to an oil surplus in 2020 despite OPEC’s supply cuts until March.

“Oil prices have been slipping in recent days even as stock markets have rallied and inventory data has reported large drawdowns,” noted Craig Erlam of Oanda.

Asian stocks up

Stocks in Asia jumped on Friday, according to stock market news, after investors digested the developments around the U.S.-China trade front and European Central Bank (ECB)’s monetary easing.

The Asian markets reacted well after President Trump said Thursday that he is fine with an interim trade deal with China.

The ECB’s deposit rate cut by 10 basis points and a new bond-buying program to acquire $22 billion worth of assets without any time limit warmed up equity markets. 

Traders work after the opening bell at the New York Stock Exchange (NYSE) on April 18, 2019, in New York City. Photo: JOHANNES EISELE/AFP/Getty Images

ECB President Mario Draghi urged governments to follow up with fiscal measures to supplement the monetary stimulus and energize the eurozone economy.

Markets in China and South Korea were closed on Friday due to holidays. Japan’s Nikkei 225 rose 1.05 percent while the Topix index closed higher by 0.93 percent.

Hong Kong’s Hang Seng index also added 0.68 percent while Australia’s ASX 200 jumped 0.21 percent.

Indian shares closed higher on Friday. The benchmark BSE Sensex jumped 281 points or 0.7 percent while the broader Nifty50 index added 93 points or 0.8 percent.

European stocks were flat Friday morning despite the stimulus by European Central Bank (ECB) to reinvigorate the ailing eurozone economy. The pan-European Stoxx 600 hovered around the flatline in early trade.

Gold price moved up Friday but remained range-bound despite the jump in demand spurred by monetary easing by major central banks. The roadblock was trade talk optimism that lifted equity markets and dimmed bullion’s advancement.

Spot gold rose 0.4 percent to $1,503.93 while the U.S. gold futures jumped 0.3 percent to $1,511.40 per ounce.