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U.S. stock futures flat with Draghi, Yellen, Trump, and Netflix on watch

Published 01/19/2017, 07:01 AM
Updated 01/19/2017, 07:01 AM
© Reuters.  Wall Street points to a flat to lower open ahead of a multiple appearances, earnings and data

Investing.com - Wall Street futures pointed to a flat to lower open on Thursday ahead of a deluge of data with eyes on earnings and appearances from European Central Bank (ECB) president Mario Draghi, Federal Reserve (Fed) chair Janet Yellen and President-elect Donald Trump, along with a confirmation hearing for the candidate to the U.S. Treasury Steve Mnuchin.

The blue-chip Dow futures slipped 12 points, or 0.06%, by 6:56AM ET (11:56GMT), the S&P 500 futures inched down 2 points, or 0.09%, while the tech-heavy Nasdaq 100 futures dropped 3 points, or 0.06%.

The session’s big event on both sides of the Atlantic will be Mario Draghi’s press conference at 8:30AM ET (13:30GMT) as he explains the previously released ECB interest rate decision.

Analysts were not expecting any change in policy though Draghi could provide hints on the outlook for the ECB’s asset purchase program.

Attention will also be focused once again on the U.S.’ own monetary policy chief. Yellen speaks again Thursday evening at 8:00PM ET (01:00GMT Friday) on the economic outlook and monetary policy at Stanford University.

In remarks delivered to the Commonwealth Club in San Francisco on Wednesday, Yellen said it would "makes sense" for the U.S. central bank to gradually lift interest rates with the U.S. economy close to full employment and inflation headed toward the Fed's 2% goal.

The Fed chief said that she and other Fed policymakers expected the central bank to lift its key benchmark short-term rate "a few times a year" through 2019. That pace could change depending on how the outlook for the economy develops, Yellen cautioned.

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Experts at Rabobank in fact remained skeptical, repeating their call for just one hike this year as they believe that, even if Trump moves forward with economic policies, there will be a “large lag” as implementation begins and the policies begin to have an impact.

Markets were still betting on just two hikes this year. Fed fund futures priced in a 69.7% chance that the first increase would come in June with odds for a second hike in November at 53.0%, according to Investing.com's Fed Rate Monitor Tool.

Markets saw only a 39.1% chance that the Fed would manage to fulfill its projection of three hikes by December.

Trump himself is scheduled to deliver remarks during the second act of the concert at Lincoln Memorial, dubbed the “Make America Great Again! Welcome Celebration”, tentatively set for 11:15AM ET (16:15GMT) and coming just one day ahead of the incoming President’s inauguration speech on Friday.

Also on Thursday, market players will keep the confirmation hearing of Trump's Treasury pick, Steven Mnuchin, on the radar for any comments the former Goldman Sachs partner may say about the dollar.

Remarks about China and its currency will also be of big interest when Mnuchin appears before Congress Thursday morning.

On the economic front, investors will digest a data downpour at 8:30AM ET (13:30GMT) with the release of weekly jobless claims, the January Philadelphia Fed manufacturing index, along with housing starts and building permits for December.

As earnings season continues to roll out, 11 S&P companies report before the bell on Thursday with another four set to publish after the close.

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As of Wednesday’s close, 43 S&P firms had already released fourth quarter numbers with 71% beating consensus on earnings per share and 51% topping forecasts with sales.

On watch, Netflix (NASDAQ:NFLX) was soaring more than 8% in pre-market trade as the streaming video pioneer confirmed adding over a third more subscribers than expected in the last quarter of 2016.

Dow components IBM (NYSE:IBM) and American Express (NYSE:AXP) will release earnings after Thursday’s market close.

Meanwhile, oil prices rose on Thursday, bouncing off the prior session's one-week low as market players awaited fresh weekly information on U.S. stockpiles of crude and refined products.

The U.S. Energy Information Administration will release its weekly report on oil supplies at 11:00AM ET (16:00GMT) Thursday, amid analyst expectations for a decline of 342,000 barrels.

This week's report comes out one day later than usual due to Monday's Martin Luther King Jr. holiday.

After markets closed Wednesday, the American Petroleum Institute said that U.S. oil inventories fell by 5.0 million barrels in the week ended January 13.

U.S. crude futures gained 0.72% to $51.45 by 6:59AM ET (11:59GMT), while Brent oil advanced 0.85% to $54.38.

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