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U.S. futures cautious ahead of Yellen and GDP; oil retreats from $50

Published 05/27/2016, 06:59 AM
© Reuters.  Wall Street inches up with caution while markets wait for Yellen and Q1 GDP
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Investing.com – Wall Street futures pointed to a slightly higher open on Friday as markets looked ahead Federal Reserve (Fed) chair Janet Yellen’s first appearance since last week’s release of the hawkish meeting minutes and the publication of the second estimate for first quarter domestic product (GDP) before shutting up shop for the long weekend due to Memorial Day holiday next Monday.

The blue-chip Dow futures edged forward 18 points, or 0.10%, by 10:54AM GMT, or 6:54AM ET, the S&P 500 futures rose 2 points, or 0.11%, while the tech-heavy Nasdaq 100 futures advanced 10 points, or 0.23%.

Market participants were anxious to see if the generally dovish Yellen would echo the recent hawkish tone taken by fellow Fed officials and give any indications of her stance on timing for the continuation of monetary policy tightening.

Yellen, set to receive an award from the Radcliffe Institute for Advanced Study at Harvard University, will take part in conversations with former Fed chief Ben Bernanke and Harvard professor Gregory Mankiw.

Paradoxically, there is a timing issue with the event. While the Fed calendar listed the kickoff as 17:15GMT, or 13:15ET, the institution hosting the event had the conversation on the agenda for 16:30GMT, or 12:30ET.

Prior to the session’s main event, the second estimate for the first quarter gross domestic product (GDP) will be released at 12:30GMT or 8:30AM ET. Expectations are for growth in the U.S. economy in the first three months of the year to be revised up to 0.9%, from the meager first reading of just 0.5%.

At 14:00GMT, or 10:00AM ET, the University of Michigan will post the first revision to its consumer sentiment index for May with consensus looking for a slight downward revision from 95.8 to 95.4.

Meanwhile, oil prices retreated on Friday, moving away from the $50 psychological level as traders feared that the higher prices could reactivate crude production, contributing to the supply glut.

The stronger US Dollar Index, moving back towards a two-month peak, also put pressure on black gold as it makes the commodity more expensive for those buyers using other currencies.

Additionally, investors looked ahead to the Baker Hughes’ data on U.S. oil rig count which remained unchanged last week after eight straight weeks of declines.

Crude oil futures for July delivery lost 0.97% to $49.00 at 10:54AM GMT, or 6:54AM ET, while Brent oil traded down 1.35% to $48.92.

In company news, Verizon Communications Inc (NYSE:VZ) was reportedly turning to Yahoo! Inc (NASDAQ:YHOO)’s former bank advisers as it prepared its bid for the Internet portal’s core assets.

Veeva Sys Inc (NYSE:VEEV) popped almost 10% in the after hours market as first quarter earnings beat on both the top and bottom line and the company’s revenue guidance topped forecasts.

Big Lots (NYSE:BIG) rose a little over 1% after better than expected first quarter earnings-per-share (EPS) and the firm boosted its full-year EPS guidance.

On the downside, GameStop (NYSE:GME) slumped more than 8% despite better-than-expected earnings as its second quarter guidance missed estimates.

Lastly, JA Solar was on the docket to report earnings before the bell.

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