US pre-open: Major indices on track to deliver weekly gains

(Sharecast News) - Wall Street futures were in the green ahead of the bell as all three major averages were firmly on track to deliver weekly gains As of 1245 GMT, Dow Jones futures were up 0.25%, while S&P 500 and Nasdaq-100 futures were 0.23% and 0.03% firmer, respectively.

The Dow closed 62.62 points higher on Thursday as sentiment continued to be bolstered by some tame inflation data.

Oil prices were broadly flat early on Friday but remained on course for a fourth straight week of declines as inventories rose and slowing industrial activity brought about concerns for future demand. West Texas Intermediate was up 0.14% at $73.0 a barrel, while Brent crude gained 0.11% to $77.54 a barrel.

Scope Markets' Joshua Mahony said: "Energy prices saw a sharp collapse yesterday, with crude oil and natural gas heading swiftly lower to the glee of central bankers. The decline in crude saw WTI fall into a four-month low, helping further allay fears that the events in the Middle East are going to have a tangible impact on energy prices. Notably, the recent optimism for global markets has glossed over the potential economic weakness that could be impending as we await the normalization of inflation. The collapse in energy prices do highlight how the weakening consumption outlook seen by retailers could translate into a similarly underwhelming demand environment for fuel.

"From a wider perspective, the optimism seen in equity markets could reflect the potential impact any economic weakness could have on the timing of a rate cut. With crude declines dampening inflation expectations, a notable period of economic weakness would likely see markets increasingly bring forward their expected timing for an initial rate cut. After all, markets are looking as early as March for the first move, with pricing around a potential cut increasing to 35%. With the Fed dot plot currently showing a mere 50 basis points worth of easing for 2024, they will either have to take on a more dovish outlook or else warn markets that the 100bp worth of cuts currently bring priced-in are unlikely."

Elsewhere, the yield on the benchmark 10-year Treasury note was lower at 4.407%, while its two-year counterpart was changing hands at 4.824%.

On the macro front, October building permits and housing starts data will be published at 1330 GMT, while Federal Reserve bankers Austan Goolsbee, Mary Daly, and Susan Collins will all speak throughout the course of the day.

In the corporate space, shares in clothing retailer Gap shot up 17% in pre-market trading after posting better-than-expected third-quarter results.

Reporting by Iain Gilbert at Sharecast.com