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U.S. Futures Largely Flat; Target and Lowe's Earnings Impress

Stock MarketsNov 17, 2021 07:01AM ET
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© Reuters.

By Peter Nurse -- U.S. stocks are seen opening largely unchanged, with investors focusing on more earnings reports from big-name retailers as well as economic data from the housing sector.

At 7 AM ET (1200 GMT), the Dow futures contract was down 35 points, or 0.1%, S&P 500 futures traded flat, while Nasdaq 100 futures climbed 20 points, or 0.1%.

The three major indices closed higher Tuesday, boosted by strong earnings from the likes of Walmart (NYSE:WMT) and Home Depot (NYSE:HD) as well as larger than expected retail sales growth for October, giving the economy a lift at the start of the fourth quarter.

That said, the gains were limited and the major averages are struggling to push significantly higher as higher inflation as well as the recovering economy look set to push the Federal Reserve to speed up the phase-out of asset purchases, bringing forward the likely first interest rate hike.

This was illustrated by comments from St. Louis Federal Reserve President James Bullard, who called on Tuesday for two rate hikes in 2022 to bring inflation expectations back under control. Bullard has been at the hawkish end of the policy spectrum for the last couple of years and his voice is still - for now - a minority one.

Goldman Sachs expects the S&P 500 index to rise by just 9% by the end of next year, compared with gains of around 25% this year, while Morgan Stanley actually looks for the broad-based benchmark index to move lower in 2022, dropping by around 6% in its base case. 

October building permits and housing starts are due at 8:30 AM ET (1330 GMT), and are expected to show a strengthening housing market.

Turning to corporate earnings, home improvement chain Lowe's (NYSE:LOW) raised its full-year sales forecast on Wednesday, boosted by higher demand from builders and contractors.

Target (NYSE:TGT) also raised its fourth-quarter forecast after its third-quarter sales jumped 13%, as shoppers flocked to its shops, looking for back-to-school supplies and early holiday gifts.

TJX (NYSE:TJX) is also due to report quarterly earnings before the open, while the likes of chipmaker Nvidia (NASDAQ:NVDA) and networking and cloud computing giant Cisco Systems (NASDAQ:CSCO) are also due Wednesday.

Elsewhere, Visa (NYSE:V) will be in the spotlight after the world’s largest retailer, Amazon (NASDAQ:AMZN), decided to stop accepting credit cards issued by the company in the U.K. from January. 

Crude prices weakened Wednesday as dollar strength and a mixed American Petroleum Institute report on domestic stockpiles. U.S. crude inventories rose 655,000 barrels last week, but gasoline stocks fell by 2.8 million barrels, more than expected, and indicative of strong domestic demand. 

Official figures from the Energy Information Administration are due later Wednesday.

By 7 AM ET, U.S. crude futures traded 0.7% lower at $79.17 a barrel, while the Brent contract fell 0.7% to $81.87. 

Additionally, gold futures rose 0.6% to $1,865.60/oz, while EUR/USD traded 0.1% higher at 1.1326.


U.S. Futures Largely Flat; Target and Lowe's Earnings Impress

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Mitchel Pioneer
Mitchel Pioneer Nov 17, 2021 8:11AM ET
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America's reckless spending spree continues, as consumers raid savings to buy everything and anything, turning a blind eye to rising prices.  And the US Ponzi Scheme responds with more "gains," as nothing is ever "priced in" unless it's poor data.  The criminal manipulation continues in the greatest financial fraud in history.
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