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U.S. futures lower as investors take profit ahead of 4th of July holiday

Published 07/01/2016, 07:03 AM
Updated 07/01/2016, 07:03 AM
© Reuters.  Wall Street points to lower open with ISM manufacturing and Fed's Mester on tap

© Reuters. Wall Street points to lower open with ISM manufacturing and Fed's Mester on tap

Investing.com – Wall Street futures pointed to a lower open on Friday as investors appeared to avoid exposure ahead the long holiday weekend while economic data and indications from a member of the Federal Reserve (Fed) were on tap.

The blue-chip Dow futures dropped 18 points, or 0.10%, by 11:01AM GMT, or 7:01AM ET, the S&P 500 futures fell 3 points, or 0.14%, while the tech-heavy Nasdaq 100 futures traded down 7 points, or 0.16%.

Investors were pouring into sovereign bonds worldwide which bond guru Mohamed El-Erian suggested was a reflection of weaker economic growth and dovish central banks.

Yields on 10- and U.S. 30-Year U.S. Treasuries plunged on Friday to 1.382% and 2.194%, respectively, within striking distance of record lows.

St. Louis Federal Reserve Bank president James Bullard stuck to his view late Thursday that the U.S. monetary authority would only need one rate hike and played down concern over the impact of the U.K.’s exit from the European Union, known as a Brexit, on the U.S. economy.

Fellow Cleveland Fed president Loretta Mester was scheduled to speak on the economy and monetary policy at 15:00GMT, or 11:00AM ET.

Investors looked ahead to the ISM manufacturing data for June and U.S. total vehicle sales.

In oil markets, after crude closed on Thursday with nearly a 25% quarterly surge, its largest in seven years, market players took profits as fears of a supply glut resurfaced on Friday.

Traders showed concern over improvements on U.S. shale oil as a Reuters’ report showed that crude output decline rates were dropping.

A separate report also suggested that the global overhang could hamper prices well into 2018.

U.S. crude futures fell 0.60% to $48.04 by by 11:01AM GMT, or 7:01AM ET, while Brent oil traded down 0.60% to $49.41.

Similar to the flight to safety seen in bonds, gold jumped more than 1% on Friday still hovering close to the previous week’s 27-month highs as continued uncertainty following the Brexit vote and concerns over a slowdown in China lent support to the safe-haven precious metal.

Elsewhere, Asian shares rose on Friday despite a disappointing China manufacturing survey from Caixin and an otherwise busy regional data day with investors taking a cue from U.S. gains overnight and prospects for easier monetary policy in Britain post Brexit.

European equities were trading mixed after a lower open with most investors taking a breath from the recent post-Brexit rally despite positive reads on manufacturing activity in the region with both the euro zone and the U.K. PMIs beating expectations.

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