U.S. stock futures flat ahead of GDP, trade data and Trump speech

© Reuters. Wall Street futures point to flat open with eyes on the U.S. economy

Investing.com - Wall Street stock futures pointed to a slightly lower open on Tuesday as investors waited for data ranging from the economy to trade to consumer confidence and set their sights on U.S. President Donald Trump’s first address to a joint session of Congress.

The blue-chip Dow futures slipped 5 points, or 0.03%, by 6:50AM ET (11:50GMT), the S&P 500 futures dropped 1 point, or 0.03%, while the tech-heavy Nasdaq 100 futures gave up 1 point, or 0.02%.

Trump will make his first major address to Congress on Tuesday at 9:00PM ET (02:00GMT Wednesday), with investors hoping he will shed light on his promises of tax reform and infrastructure spending.

Market players will also be eager to learn more about Trump's plans for repealing the Affordable Care Act and reducing regulations on businesses.

White House budget officials told reporters Monday that Trump's first budget will call for a $54 billion increase in defense spending and a corresponding cut in what his administration deems lower priority programs.

In an interview earlier on Tuesday, Trump told Fox News that the U.S. would get more defense products for their buck and that he thought some of the money for the $54 billion increase would come from a “revved up economy”.

With regard to the address to Congress, economists from ING said that “the devil is the detail, but confirmation that spending stimulus is on its way in this budget could be enough to refuel reflationary hopes.”

These economists outlined possible remarks from Trump that could increase the odds of a March rate hike from the Federal Reserve (Fed). Among these, they mentioned tentative figures of a reduction in corporate taxes to around 20%, that his infrastructure spending will be introduced into the 2017/2018 budget or that he outlines credible revenue generating policies.

According to these experts, the downside risks from the appearance are that “investors will check the revenue neutrality of Trump’s promises, while strong protectionist rhetoric won’t be well received.”

Market participants will also be on the watch for data out stateside. The U.S. will release its second estimate of fourth quarter gross domestic product (GDP) at 8:30AM (13:30GMT) along with trade data for January.

Later in the session, the Conference Board will also release its consumer confidence for February while investors will additionally digest readings on the manufacturing sector from the regions of the Chicago and Richmond Fed.

There are also a few Fed speakers on Tuesday. Dallas Fed President Rob Kaplan will be on CNBC's "Squawk Box" at 7:30AM ET (12:30GMT), Philadelphia Fed President Patrick Harker speaks at 3PM ET (20:00GMT) on the economic outlook, while San Francisco President John Williams also speaks on at 3:30PM ET (20:30GMT).

Investors raised their outlook on a faster pace of U.S. rate increases after Kaplan, who is a voting member on the central bank's rate-setting committee this year, on Monday repeated his view that it would be prudent for the U.S. central bank to raise interest rates sooner rather than later.

Fed fund futures priced in about a 33% chance of a rate hike in March, according to Investing.com’s Fed Rate Monitor Tool. Odds of a May increase were seen at 53%, while June odds were at around 73%.

In earnings news, Target (NYSE:TGT) crashed more than 10% in pre-market trade Tuesday as the second largest U.S. retailer missed forecasts on both the top and bottom line, while saying it estimated it will earn $3.80 to $4.20 a share in its current fiscal year, compared to consensus expectations of $5.37.

Meanwhile, oil prices registered slight losses on Tuesday as market players continued to weigh the prospect of production cuts by major crude-producing nations against a rise in U.S. drilling.

Investors also looked forward to a reading on U.S. crude stockpiles from the American Petroleum Institute out later on Tuesday.

U.S. crude futures fell 0.26% to $53.91 by 6:54AM ET (11:54GMT), while Brent oil lost 0.28% to $56.26.