Investing.com - Wall Street futures pointed to a slightly higher open on Friday as investors looked ahead to major banks kicking off the reporting season and key gauges on U.S. consumer activity.
The blue-chip Dow futures advanced 22 points, or 0.11%, by 7:20AM ET (12:20GMT), the S&P 500 futures edged forward 2 points, or 0.10%, while the tech-heavy Nasdaq 100 futures gained 8 points, or 0.16%.
Friday will see the fourth quarter earnings season kick off in earnest with the first reports from components of the Dow Jones.
Bank of America (NYSE:BAC) traded up 0.5% in pre-market trade after being the first blue-chip to report fourth quarter results with its earnings-per-share of $0.40, beating by consensus two cents.
Other financial sector companies such as PNC Financial (NYSE:PNC) or asset manager Blackrock (NYSE:BLK) also beat consensus on Friday, sparking a postive start to the fourth quarter earnings season.
JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) were still on tap to report before the opening bell.
Analysts expect fourth-quarter earnings will show an increase of 6.1% from a year ago. The S&P financial sector earnings are expected to have the biggest gains, with earnings up 15.7%.
On the economic front, all eyes will be on the state of the U.S. consumer.
The Commerce Department will publish data on December retail sales at 8:30AM ET (13:30GMT). The consensus forecast is that the report will show retail sales rose 0.7% last month, after gaining 0.1% in November. Core sales are forecast to inch up 0.5%, after rising 0.2% a month earlier.
At 10:00AM (GMT 15:00GMT), the University of Michigan will release its reading on consumer sentiment for January, with optimism expected to hit a fresh 12-year high.
Apart from the retail sector, investors will also digest data on producer prices for December and November business inventories.
Furthermore, after a flurry of appearances from U.S. central bank policymakers in the prior session, only Philadelphia Fed president Patrick Harker will be on the Friday’s schedule.
After Thursday’s market close, Federal Reserve (Fed) Janet Yellen gave a generally upbeat reading of the U.S. economy.
Although her prepared remarks to U.S. educators avoided the economy and monetary policy, Yellen responded in the Q&A that the U.S. central bank was focusing on low unemployment and stable inflation.
She showed optimism over the economy “doing quite well” with the labor market generally strong and wage increases picking up pace.
Yellen admitted that inflation was below the 2% target but pointed out that it had risen from very low level and was getting close.
Experts from Brown Brothers Harriman summed up the prior day’s commentaries by pointing out that Yellen’s speech simply confirmed that the Fed's chair's economic assessment has not changed over the past month.
“Second, and more importantly, the three regional Fed presidents that spoke (Bullard, Kaplan, and Harker) all suggested that the central bank begins discussing when and how to reduce the Fed's balance sheet,” they said.
These strategists highlighted that there is almost $200 billion of U.S. Treasuries in the central bank’s hands that mature in 2017 and almost twice as much next year with some advisers to incoming President Donald Trump already pushing for an exit strategy.
Markets were still looking for the first rate hike in June while doubting the Fed’s call for three hikes this year, pricing in odds of only 32.3%, according to Investing.com’s Fed Rate Monitor Tool.
Meanwhile, oil prices dropped by around 1% on Friday, as OPEC sources told Reuters that major oil producers were unlikely to fully implement their promised cuts.
According to the report, delegates said that 80% compliance would be good while as low as 50% would be acceptable.
Investors were also cautious as they waited for more signs of the ramp up in U.S. drilling activity in the weekly report from Baker Hughes.
According to the oilfield services provider, data last week showed that the number of rigs drilling for oil in the U.S. increased by 4 to 529, the tenth straight weekly rise and a level not seen in more than a year.
U.S. crude futures fell 1.15% to $52.40 by 7:21AM ET (12:21GMT), while Brent oil lost 1.09% to $55.40.
Elsewhere, eyes were on the fact that China reported a year-on-year decline in exports of 6.1% in December, taking its total decline in 2016 to a drop of 7.7%.
That was its second annual decline in a row and the worst since the depths of the global crisis in 2009.