1. Happy Friday on Wall Street
U.S. stock futures are set to for a bright start as Thursday’s rally in semiconductor stocks, which drove Asian and European markets to a seven-week high overnight, underpins sentiment.
The rally overshadowed the disappointment of the Senate’s failure Thursday to break the deadlock over the partial shutdown of the federal government.
At 05:25 AM ET (10:25 GMT), the blue-chip Dow futures contract was up 145 points, or about 0.6%, the S&P 500 futures rose 17 points, also a rise of 0.6%, while the tech-heavy Nasdaq 100 futures was indicated up 62 points, or 0.9%. Aside from the tech sector, a strong earnings report after the bell Thursday by Starbucks (NASDAQ:SBUX) is also likely to help the mood.
2. AbbVie, Colgate-Palmolive, Air Products Earnings Due
The earnings calendar for Friday is reasonably light, with pharma company AbbVie (NYSE:ABBV), industrial gases group Air Products (NYSE:APD) and consumer giant Colgate-Palmolive (NYSE:CL) the biggest names to report before the bell.
Pharma results so far this quarter have been mixed, with Bristol-Myers Squibb (NYSE:BMY) beating expectations Thursday while Abbott Labs (NYSE:ABT) shares slipped after its report.
Earlier, Swedish telecoms equipment group Ericsson (BS:ERICAs) shares rose 2.4% after a solid fourth-quarter report. Conditions in its key markets are set to improve as western governments push back against the ambitions of Huawei, one of its biggest rivals. Meanwhile, U.K. telecoms group Vodafone (LON:VOD) fell to a new nine-year low after reporting a slowdown in revenue at the end of 2018.
3. Durable Goods, New Home Sales Due
There’ll be two new updates on the health of the U.S. economy this morning, with durable goods orders for December due at 08:30 AM ET, followed by new home sales data for November at 10:00 AM ET.
Core durable goods orders, which have weakened in recent months, are expected to have risen 0.3% in December, reversing a drop in November.
Home sales are also expected to tick up slightly to 560,000, although the data predate the Federal Reserve’s latest interest rate hike, which will make home loans more expensive. Investors can get a cross-check on the housing market from homebuilder DR Horton (NYSE:DHI), which will report quarterly results later today.
4. Dollar Mixed on Stronger Sterling, Softer Euro
The U.S. dollar is mixed against major currencies after the euro slid as the German ifo business confidence index hit a two-year low. European Central Bank board member Benoit Coeure also hinted that the ECB may not even raise rates this year, as has been expected so far, due to the slowdown in the economy. Coeure said it’s “too early” to say whether rates will go up in 2019.
Elsewhere, the pound hit a three-month high against the dollar and a two-year high against the euro after a report that further raised hopes the country won’t crash out of the European Union without a deal in March.
5. Crude Comes Off Overnight Highs
Crude oil futures have come off overnight highs that followed news that the U.S. is considering sanctions against Venezuelan exports. Sanctions would further tighten global supply, coming on top of existing ones against Iran, an even bigger oil exporter. However, the near-term picture is less bullish: the Energy Information Administration said Thursday U.S. crude inventories rose by 7.97 million barrels in the week to Jan. 18, compared to forecasts for a stockpile draw of 0.042 million barrels.
Later in the day, Baker Hughes will update the market with its weekly rig count data. Last week’s data showed the sharpest drop in over two years, consistent with warnings from major shale producers that they will cut back investment in production in response to lower prices.