Futures Pointing To Initial Rebound On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground after trending lower over the past several session.

A positive reaction to the latest earnings news may contribute to initial strength on Wall Street, as some traders look to pick up stocks at relatively reduced levels.

Shares of Citigroup (C) are moving sharply higher in pre-market trading after the financial giant reported second quarter earnings that exceeded analyst estimates.

Health insurer UnitedHealth (UNH) is also likely to see initial strength after reporting better than expected second quarter results and raising its full-year guidance.

On the other hand, shares of Wells Fargo (WFC) may move to the downside after the mortgage banking giant reported second quarter earnings that missed expectations.

The future have fluctuated following the release of some key U.S. economic data, including a report from the Commerce Department showing retail sales jumped by more than expected in the month of June.

The Commerce Department said retail sales shot up by 1.0 percent in June after edging down by a revised 0.1 percent in May.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.3 percent dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still surged by 1.0 percent following a 0.6 percent increase in May. Ex-auto sales were expected to climb by 0.6 percent.

A separate report released by the Federal Reserve Bank of New York on Friday unexpectedly showed growth in regional manufacturing activity in the month of July.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

While the better than expected data may help ease concerns about a potential recession, it may also add to worries about the Federal Reserve's willingness to aggressively raise interest rates.

After moving sharply lower early in the session, stocks regained ground over the course of the trading day on Thursday but still ended the day mostly lower. The major averages climbed well off their worst levels of the day, with the Nasdaq closing just above the unchanged line.

The tech-heavy Nasdaq plunged as much as 2.1 percent in early trading but ended the day up 3.60 points or less than a tenth of a percent at 11,251.19. Meanwhile, the Dow fell 142.62 points or 0.5 percent to 30,630.17 and the S&P 500 dipped 11.40 points or 0.3 percent to 3,790.38.

The early weakness on Wall Street partly reflected disappointing earnings news from financial giants JPMorgan Chase (JPM) and Morgan Stanley (MS).

JPMorgan slumped by 3.5 percent and Morgan Stanley slipped by 0.4 percent after both companies reported second quarter earnings that missed analyst estimates.

Concerns about inflation and higher interest rates also continued to weigh on the markets after the Labor Department released a report showing U.S. producer prices increased by more than expected in the month of June.

The Labor Department said its producer price index for final demand jumped by 1.1 percent in June after climbing by an upwardly revised 0.9 percent in May.

Economists had expected producer prices to increase by 0.8 percent, matching the advance originally reported for the previous month.

The annual rate of producer price growth accelerated to 11.3 percent in June, reflecting the largest spike since a record 11.6 percent jump in March.

Economists had expected the annual rate of producer price growth to slow to 10.7 percent in June from 10.9 percent in May.

The Labor Department released a separate report on Wednesday showing U.S. consumer prices also surged by more than expected in the month of June.

Another report from the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly inched higher in the week ended July 9th.

The report showed initial jobless claims crept up to 244,000, an increase of 9,000 from the previous week's unrevised level of 235,000. The uptick surprised economists, who had expected jobless claims to come in unchanged.

Despite the recovery attempt by the broader markets, gold stocks continue to see substantial weakness on the day. The NYSE Arca Gold Bugs Index plunged by 4.6 percent to its lowest closing level in over two years. The sell-off by gold stocks came amid a steep drop by the price of the precious metal.

Significant weakness also remained visible among steel stocks, as reflected by the 4.2 percent nosedive by the NYSE Arca Steel Index. With the drop, the index fell to a one-year closing low.

Energy stocks also saw considerable weakness on the day, moving lower along with the price of crude oil. Crude for August delivery climbed well off its worst levels of the day but still closed lower.

Banking, biotechnology and chemical stocks also showed notable moves to the downside, while semiconductor stocks moved sharply higher over the course of the session.

Commodity, Currency Markets

Crude oil futures are surging $1.78 to $97.56 a barrel after falling $0.52 to $95.78 a barrel on Thursday. Meanwhile, after tumbling $29.70 to $1,705.80 an ounce in the previous session, gold futures are slipping $3.60 to $1,702.20 an ounce.

On the currency front, the U.S. dollar is trading at 138.74 yen versus the 138.96 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0063 compared to yesterday's $1.0018.

Asia

Asian stocks ended mixed on Friday as Chinese GDP growth data missed forecasts and two Fed officials downplayed the likelihood of a 100 basis point rate hike at the U.S. central bank's July 26-27 meeting.

Chinese shares fell sharply after official data showed GDP grew 0.4 percent year-on-year in the second quarter, missing expectations for 1 percent growth. However, retail sales rose 3.1 percent in June to recover from a prior slump.

The benchmark Shanghai Composite Index slumped 1.6 percent to 3,228.06, while Hong Kong's Hang Seng Index closed 2.2 percent lower at 20,297.72.

Alibaba Group Holding shares plummeted 6 percent after reports that the tech giant's executives had been called in for meetings with Chinese officials over the theft of a vast police database.

Meanwhile, Japanese shares advanced to extend gains for a third straight session. The Nikkei 225 Index rose 0.5 percent to 26,788.47, with Uniqlo parent Fast Retailing surging 8.7 percent and video game maker Nintendo rallying 3.2 percent. The broader Topix ended marginally lower at 1,892.50.

Kansai Electric Power gained 2.4 percent and Chubu Electric Power added 1.8 percent after Prime Minister Fumio Kishida said the government would do what it can to ensure as many as nine reactors are online this winter.

Seoul stocks eked out modest gains, with automakers and technology companies pacing the gainers. The Kospi closed 0.4 percent higher at 2,330.98, while the Korean won hit the lowest level in over 13 years against the U.S. dollar.

Samsung Electronics climbed 4.4 percent and SK Hynix jumped 5 percent after TSMC announced its net profit soared 76 percent to a record level in the April-June quarter.

Australian markets fell notably, dragged down by miners after Rio Tinto flagged dismal second-half earnings. The benchmark S&P ASX 200 Index fell 0.7 percent to 6,605.60, while the broader All Ordinaries Index closed 0.7 percent lower at 6,798.

Rio Tinto shares tumbled 2.9 percent, rival BHP lost 3.5 percent and Fortescue Metals Group plunged 6.2 percent. Gold miners Newcrest and Northern Star gave up 3-4 percent.

Across the Tasman, New Zealand's NZX-50 Index dropped 0.6 percent to 11.122.61 on growth worries after a survey showed the country's manufacturing sector fell back into contraction territory in June.

Jewelry retailer Michael Hill jumped 3.7 percent after reporting improves sales and margins in the June quarter.

Singapore's Straits Times Index edged up slightly after the country's central bank tightened its monetary policy in an off-cycle move.

Europe

European stocks have rallied on Friday after two Fed officials signaled support for a second straight 75 basis point rate hike at the U.S. central bank's policy meeting later this month, alleviating some fears of a 100 basis point increase.

Italy's political turmoil remained in focus after President Sergio Mattarella rejected Prime Minister Mario Draghi's resignation and asked him to address parliament next week to get a clearer picture of the political situation.

Draghi announced his resignation after coalition party 5-Star Movement failed to back him in a confidence vote over his plan to combat soaring prices.

The European Central Bank is due to meet next week amid Italy's political turmoil. The central bank is expected to raise interest rates by 25 basis points, well short of the 75 basis points that the Fed is expected to hike in July.

While the German DAX Index has jumped by 1.3 percent, the U.K.'s FTSE 100 Index is up by 0.9 percent and the French CAC 40 Index is up by 0.6 percent.

TomTom NV has soared after the Dutch navigation and digital mapping company confirmed its revenue and cashflow guidance for 2022 and 2023 despite strained supply chains.

Automakers BMW, Volkswagen and Renault have also surged despite European passenger car registrations declining for the twelfth successive month in June.

Registrations of new passenger cars decreased 15.4 percent year-over-year in June, faster than the 11.2 percent fall in May, as supply chain issues continue to hurt production, the European Automobile Manufacturers' Association said.

On the other hand, Luxury brand Burberry has moved sharply lower after it reported sales growth of just 1 percent in its latest financial quarter.

Swiss luxury goods group Richemont has also tumbled after the company saw sales in mainland China plunge 37 percent in the three months through June amid lockdowns, stringent testing requirements and a near collapse in international tourist travel.

Miner Rio Tinto has also shown a notable move to the downside after it warned of considerable headwinds impacting its underlying earnings in the second half.

U.S. Economic Reports

Retail sales in the U.S. jumped by more than expected in the month of June, according to a report released by the Commerce Department on Friday.

The Commerce Department said retail sales shot up by 1.0 percent in June after edging down by a revised 0.1 percent in May.

Economists had expected retail sales to increase by 0.8 percent compared to the 0.3 percent dip originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales still surged by 1.0 percent following a 0.6 percent increase in May. Ex-auto sales were expected to climb by 0.6 percent.

A separate report released by the Federal Reserve Bank of New York unexpectedly showed growth in regional manufacturing activity in the month of July.

The New York Fed said its general business conditions index jumped to a positive 11.1 in July from a negative 1.2 in June, with a positive reading indicating growth in regional manufacturing activity. The increase surprised economists, who had expected the index to edge down to a negative 2.0.

Meanwhile, the New York Fed said firms turned pessimistic about the six-month outlook, calling the move a rare occurrence in the survey's history.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

The Labor Department said import prices inched up by 0.2 percent in June after climbing by a downwardly revised 0.5 percent in May.

Economists had expected import prices to advance by 0.7 percent compared to the 0.6 percent increase originally reported for the previous month.

Meanwhile, the report showed export prices rose by 0.7 percent in June after surging by an upwardly revised 2.9 percent in May.

Export prices were expected to jump by 2.0 percent compared to the 2.8 percent spike originally reported for the previous month.

At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of June. Industrial production is expected to inch up by 0.1 percent in June after ticking up by 0.2 percent in May.

The University of Michigan is due to release its preliminary report on consumer sentiment in the month of July at 10 am ET. The consumer sentiment index expected to edge down to 49.9 in July from 50.0 in June.

Also at 10 am ET, the Commerce Department is scheduled to release its report on business inventories in the month of May. Business inventories are expected to jump by 1.2 percent.

Stocks In Focus

Shares of Pinterest (PINS) are moving sharply higher in pre-market trading after a report from the Wall Street Journal said activist investor Elliott Management has taken a big stake in the image sharing company.

Electric aviation company Vertical Aerospace (EVTL) is also seeing substantial pre-market strength after announcing European business jet operator FLYINGGROUP has conditionally pre-ordered up to 50 VX4 aircraft.

On the other hand, shares of BlackRock (BLK) are likely to see initial weakness after the asset management firm reported weaker than expected second quarter earnings.