U.S. Futures Up; Intel and PMI Data in Focus

U.S. Futures Up; Intel and PMI Data in Focus

U.S. stocks opened marginally higher on Friday, bouncing back slightly from the previous session’s sharp losses. Investors were still cautious of the potential hike in capital gains tax.

The Dow Futures contract added 55 points, or 0.2% at 7:05 AM ET (1205 GMT). The S&P 500 Futures traded 10 points, or 0.2%, higher, and Nasdaq 100 Futures inched up 23 points, or 0.2%.

On Thursday, the major U.S. indices all closed just short of 1% lower, their biggest slide in five weeks. This came after reports that President Joe Biden is set to propose almost doubling the capital gains tax. But that’s for those whose earnings are more than $1 million a year, to potentially just short of 40%. 

The news rattled investor sentiment over concerns that investors will sell stocks. Moreover,  cashing in before any bill becomes law. 

With that, there is also some skepticism that the proposal can get through the political process. That will be in the form suggested, given the likely heated opposition.

The corporate earnings season is scheduled on Friday, with companies having managed to beat Wall Street’s forecasts. 

The Corporate Earnings Season

Among the companies reporting ahead of the bell on Friday include industrial conglomerate Honeywell, personal-care company Kimberly-Clark, and oilfield services firm Schlumberger. All are expected to post lower profit and growth from 2020.

Also likely to be in the spotlight after the chip maker’s 2Q profit forecast fell short of expectations, is Intel. This is even as it raised its yearly sales outlook, as the company was forced to spend heavily. That is in order to get its manufacturing operations back on track as well as catch up with rivals with faster chips.

On Friday, at 9:45 AM ET (14:45 GMT), the U.S. economic data is due for release. It will include preliminary “flash” readings of manufacturing and services PMI indices for this month.. They are expected to confirm the ongoing recovery.

The recovery from the region’s economic downturn was much stronger than expected in April. This was shown by Equivalent numbers in Europe earlier on Friday.

March new home sales are due in 15 minutes, and consensus calls for 885,000. This would be a substantial jump over February’s 775,000.  

Also on Friday, oil prices edged higher, boosted by the improving economic conditions in Europe and the U.S.. However, concerns about the second wave of Covid-19 cases in India kept a cap on the gains.