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Stocks May Move To The Upside In Early Trading - U.S. Commentary


Following the lackluster performance in the previous session, stocks are likely to move to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 134 points.

Early buying interest may be generated amid optimism about U.S.-China trade talks as well as indications of more Chinese economic stimulus.

Chinese Premier Li Keqiang pledged support for the slowing economy during his annual news conference at the end of the National People's Congress.

Li said the country could use reserve requirements and interest rates to prevent a sharper deceleration in the world's second-largest economy.

However, the positive sentiment may be partly offset by a report from the New York Federal Reserve showing an unexpected slowdown in the pace of growth in regional manufacturing activity.

The New York Fed said its headline general business conditions index fell to 3.7 in March after climbing to 8.8 in February.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to rise to 10.0.

The index remained below 10 for the third straight month, which the New York Fed said suggests growth has remained quite a bit slower so far this year than it was for most of 2018.

Just before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of February. Industrial production is expected to rise by 0.4 percent in February after falling by 0.6 percent in January.

The University of Michigan is also due to release its preliminary report on consumer sentiment in the month of March shortly after the open. Economists expect the consumer sentiment index to climb to 95.3 in March after rising to 93.8 in February.

Stocks showed a lack of direction throughout the trading day on Thursday following the notable upward move seen on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

Eventually, the major averages ended the day mixed. While the Dow inched up 7.05 points or less than a tenth of a percent to 25,709.94, the Nasdaq dipped 12.50 points or 0.2 percent to 7,630.91 and the S&P 500 edged down 2.44 points or 0.1 percent to 2.808.48.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.8 percent, while China's Shanghai Composite Index jumped by 1 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has climbed by 0.6 percent, the French CAC 40 Index and the German DAX Index are both up by 0.9 percent.

In commodities trading, crude oil futures are slipping $0.33 to $58.28 a barrel after rising $0.35 to $58.61 on Thursday. Meanwhile, after tumbling $14.20 to $1,295.10 an ounce in the previous session, gold futures are climbing $7.50 to $1,302.60 an ounce.

On the currency front, the U.S. dollar is trading at 111.65 yen compared to the 111.70 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1310 compared to yesterday's $1.1304.

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