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Stocks - U.S. Futures Move Higher in Key Week for Earnings, Retail Sales on Tap

Published 04/16/2018, 06:54 AM
© Reuters.  U.S. futures put to higher open as investors watch earnings, retail sales

Investing.com - U.S. futures pointed to a higher open Monday on Wall Street as investors breathed a sigh of relief over tensions in Syria and braced for a big week in earnings.

The blue-chip Dow futures gained 143 points, or 0.59%, by 6:51AM ET (10:51GMT), the S&P 500 futures rose 15 points, or 0.56%, while the tech-heavy Nasdaq 100 futures traded up 40 points, or 0.61%

Tension over escalating conflict in Syria seemed to fade over the weekend after the U.S., France and UK undertook an airstrike on chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.

Although Russian President Vladmir Putin warned Sunday that further attacks on Syria could cause “chaos in international relations”, U.S. President Donald Trump’s declaration of “mission accomplished” led market participants to interpret that no immediate military escalation would be forthcoming.

With caution over geopolitical tensions in the background, traders were set for a big week of first quarter earnings including a handful of Dow components and dozens of S&P 500 firms.

Earnings growth is expected to be up about 18.5%, according to Thomson Reuters data, the highest in seven years, as results are likely to have been boosted by President Trump's tax cuts.

For Monday’s session, Bank of America (NYSE:BAC) saw shares gain about 0.4% in pre-market trade after the firm reported first quarter earnings per share of $0.62 on revenue of $23.27 billion. That compared to forecasts for $0.59 and $23.06, respectively.

Netflix (NASDAQ:NFLX) is scheduled to release its own quarterly numbers after the market close.

On the data front, investors will digest March retail sales and the NY Empire State manufacturing index for April at 8:30AM ET (12:30GMT), followed by February business inventories and the NAHB housing market index for April at 10:00AM ET (14:00GMT).

Markets will also pay attention to appearances from Federal Reserve policymakers Robert Kaplan, Neel Kashkari and Raphael Bostic as they look for hints on the path of interest rates.

Fed fund futures price in the odds of the next hike for the June meeting at 90%, while Investing.com’s Fed Rate Monitor Tool shows the probability of a third hike in December at around 84%.

Ahead of the data releases and Fed appearances, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.27% to 89.27 by 6:52AM ET (10:52GMT), while gold for June delivery on the Comex division of the New York Mercantile Exchange edged down 0.13% to $1,346.10.

Elsewhere, Europe’s major bourses were little changed. However, London’s FTSE 100 was down around 0.4% with the index plagued by losses in commodities and a stronger pound.

Earlier, in Asia, most markets in the region closed lower, led by declines in Hong Kong and mainland China over worries about the Hong Kong dollar.

Oil prices sank around 1% on Monday after having gained 8% last week. Traders opted to take profit after Baker Hughes’ data released late Friday showed that U.S. drillers added seven oil rigs in the week to April 13, bringing the total count to 815, the highest number since March 2015. The data underscored worries that rising U.S. output could potentially derail OPEC's effort to end a supply glut.

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