Business World

Friday 21 September 2018

Wall Street set to open higher as oil prices rise

* Oil prices rose more than 1 pct

* Netflix up after top analyst expects Q2 beat

* Facebook drops as data scandal probe worries resurface

* Futures up: Dow 0.58 pct, S&P 0.44, Nasdaq 0.59

Markets will close at 1pm, ahead of the Fourth of July holiday Photo: Bloomberg
Markets will close at 1pm, ahead of the Fourth of July holiday Photo: Bloomberg

Amy Caren Daniel

Wall Street was set to open higher on Tuesday on the back of gains in oil prices and shares of big technology companies.

Trading volumes are expected to be lower in the day as markets will close at 1pm, ahead of the Fourth of July holiday.

Oil prices climbed more than 1pc after Libya declared force majeure on significant amounts of its supply, though rising overall US and OPEC output dragged on markets.

But the specter of trade turbulence continued to loom over the markets, with President Donald Trump on Monday warning the World Trade Organization of "doing something" if United States is not treated properly.

Investors are wary of a July 6 deadline when Washington is set to impose tariffs on $34bn worth of Chinese goods, with Beijing expected to retaliate with tariffs on US goods.

Wall Street, however, was set for another firmer session as investors positioned for strong Silicon Valley earnings before the reporting season starts next week.

Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said the Chinese yuan firming was aiding the sentiment as "it initially provided some support for equity prices in Asia and Europe and is now spilling over to the United States."

Major state-owned Chinese banks were seen swapping yuan for dollars in forwards and immediately selling them into the spot market to prop up the Chinese currency, four traders said.

At 8:39 a.m. ET, Dow e-minis were up 141 points, or 0.58pc. S&P 500 e-minis were up 12 points, or 0.44pc and Nasdaq 100 e-minis were up 41.75 points, or 0.59pc.

"Today is going to be a day where we have a short session for both fixed income and equity investors pre-holiday," Luschini said.

"There's not going to be a lot ultimately taken away from today's trading regardless of what direction the market goes in."

Shares of Netflix gained 0.7pc in premarket trading after a Wall Street analyst forecast the company would beat second-quarter earnings estimates due to its original series.

Other heavyweight technology stocks were also trading higher, but Facebook declined 1.3pc on a Washington Post report that the federal probe into the Cambridge Analytica data breach had been broadened.

Tesla fell 1.1pc and was set to add to its 2.3pc drop from Monday when the electric carmaker said it met its Model 3 production goal but failed to convince investors it could continue to do so.

Other automakers will also be in focus as they will report sales for June. On the economic front, May factory orders are expected to have remained unchanged, after decreasing 0.8pc in April. The data is due at 10 am ET.


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