U.S. Stocks May See Further Upside In Early Trading

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open for the markets on Friday, with stocks likely to add to the gains posted in the two previous sessions.

The markets may continue to benefit from yesterday's upbeat U.S. economic data, which helped ease concerns about the impact of President Donald Trump's trade wars.

Buying interest may also be generated in reaction to the latest earnings news, with shares of 3M (MMM) surging by 2.7 percent in pre-market trading after the company reported second quarter results that exceeded analyst estimates and raised its full-year sales guidance.

American Express (AXP) may also move to the upside after the company reported second quarter results that beat expectations on both the top and bottom lines.

On the other hand, shares of Netflix (NFLX) are slumping by 2.9 percent in pre-market trading after the streaming giant reported better than expected second quarter results but warned its operating margin in the second half will be lower than the first half.

Housing stocks may see some strength after the Commerce Department released a report showing new residential construction in the U.S. rebounded by more than expected in the month of June.

After moving modestly higher over the course of Wednesday's session, stocks saw further upside during trading on Thursday. With the continued upward move, the Nasdaq and the S&P 500 reached new record closing highs.

The major averages ended the session near their best levels of the day. The Nasdaq advanced 153.78 points or 0.7 percent to 20,884.27, the S&P 500 climbed 33.66 points or 0.5 percent to 6,297.36 and the Dow rose 229.71 points or 0.5 percent to 44,484.49.

The continued strength on Wall Street came following the release of a batch of largely upbeat U.S. economic data, including a Commerce Department report showing retail sales rebounded by much more than expected in the month of June.

The report said retail sales climbed by 0.6 percent in June after slumping by 0.9 percent in May. Economists had expected retail sales to inch up by 0.1 percent.

Excluding a jump in sales by motor vehicle and parts dealers, retail sales still rose by 0.5 percent in June after edging down by 0.2 percent in May. Ex-auto sales were expected to rise by 0.3 percent.

"There has been a lot of talk about tariffs and the stock market back to all-time highs, but there has been less talk about the economy at full employment and a consumer who continues to spend," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

He added, "Although valuations are high, as long as the economy continues to expand and unemployment remains low, then people will continue to spend and the flywheel can keep generating higher profits, which is the engine for higher stock prices.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly dipped to a three-month low in the week ended July 12th.

The Labor Department said initial jobless claims fell to 221,000, a decrease of 7,000 from the previous week's revised level of 228,000.

Economists had expected jobless claims to rise to 235,000 from the 227,000 originally reported for the previous week.

The Labor Department also released another report showing import prices in the U.S. inched up by less than expected in the month of June.

Networking stocks turned in some of the market's best performances on the day, with the NYSE Arca Networking Index surging by 2.0 percent.

Significant strength also emerged among oil service stocks amid a sharp increase by the price of crude oil, driving the Philadelphia Oil Service Index up by 1.7 percent.

Financial, steel and software stocks also showed strong moves to the upside, while pharmaceutical and healthcare stocks came under pressure over the course of the session.

Commodity, Currency Markets

Crude oil futures are jumping $1.12 to $68.66 a barrel after surging $1.16 to $67.54 barrel on Thursday. Meanwhile, after falling $13.80 to $3,345.30 an ounce in the previous session, gold futures are climbing $20 to $3,365.30 an ounce.

On the currency front, the U.S. dollar is trading at 148.41 yen versus the 148.58 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1650 compared to yesterday's $1.1596.

Asia

Asian stocks gave up early gains to end mixed on Friday as tariff-related worries offset encouraging tech earnings and positive U.S. economic data.

The dollar index pulled back slightly after Federal Reserve Governor Christopher Waller said policymakers should cut interest rates this month to counter rising growth and job market risks.

Gold edged up slightly on dollar weakness, while oil held a gain on brewing Middle East tensions and data signaling strong U.S. demand.

China's Shanghai Composite Index rose half a percent to 3,534.48 amid expectations the government may roll out more stimulus to boost domestic demand.

Meanwhile, according to a statement from the Chinese commerce ministry released today, China has called on the United States to abandon zero-sum thinking and continue to lift "unjustified" trade and economic restrictions.

Hong Kong's Hang Seng Index rallied 1.3 percent to 24,825.66, buoyed by a positive outlook from Taiwan Semiconductor and strong earnings from Netflix.

Japanese stocks ended slightly lower and government bond yields dropped across maturities as data showed Japan's core inflation rate fell to 3.3 percent in June after hitting a 29-month high. Investors also braced for the closely watched election this weekend.

The Nikkei 225 Index dipped 0.2 percent to 39,819.11, while the broader Topix Index settled 0.2 percent lower at 2,834.48.

Seoul stocks closed lower as investors waited for second-quarter earnings results from major companies and eyed further developments in U.S. trade policy.

The Kospi slipped 0.1 percent to 3,188.07. Shipbuilder HD Hyundai fell 2.2 percent and national flag carrier Korean Air lost 1 percent.

Australian stocks hit a record high as higher commodity prices boosted mining stocks. The benchmark S&P/ASX 200 Index jumped 1.4 percent to 8,757.20, while the broader All Ordinaries Index closed up 1.3 percent at 9,006.80.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index dipped 0.2 percent to 12,880.40, halting a three-day rally. Europe

European stocks are turning in a mixed performance on Friday even as robust U.S. economic data and encouraging tech earnings helped ease tariff-related concerns for now.

While the German DAX Index is down by 0.3 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In economic news, German producer prices declined for the fourth straight month in June on lower energy prices, Destatis reported.

The producer price index dropped 1.3 percent year-on-year in June, faster than the 1.2 percent fall in May. This was the fourth consecutive decrease.

Engineering group Senior has also surged as it agreed to sell its Aerostructures division for up to £200 million and unveiled a £40 million share buyback.

Burberry Group shares has also moved sharply higher. The luxury brand reported a smaller-than-expected dip in first-quarter comparable sales.

Chemicals giant BASF SE has also moved to the upside after it signed a 10-year natural gas supply agreement with Equinor.

Defense giant Saab has also soared after reporting stronger-than-expected profit and sales growth for the second quarter.

Meanwhile, Salzgitter AG shares have plunged after the German steel company cut its full-year guidance in the wake of a weak second quarter.

Drug maker GSK has also slumped after a U.S. FDA advisory panel recommended against approving its blood cancer drug Blenrep.

Swedish home appliances maker Electrolux has also nosedived despite its second quarter operating profit coming in above expectations.

U.S. Economic News

New residential construction in the U.S. rebounded by more than expected in the month of June, according to a report released by the Commerce Department on Friday.

The Commerce Department said housing starts surged by 4.6 percent to an annual rate of 1.321 million in June after plunging by 9.7 percent to a revised rate of 1.263 million in May.

Economists had expected housing starts to jump by 3.5 percent to an annual rate of 1.300 million from the 1.256 million originally reported for the previous month.

Meanwhile, the report said building permits inched up by 0.2 percent to an annual rate of 1.397 million in June after slumping by 2.0 percent to a revised rate of 1.394 million in May.

Building permits, an indicator of future housing demand, were expected to edge down by 0.2 percent to an annual rate of 1.390 million from the 1.393 million originally reported for the previous month.

At 10 am ET, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of July. The consumer sentiment index is expected to inch up to 61.5 in July after surging to 60.7 in June.