By Peter Nurse
Investing.com - U.S. stocks are set to open lower Friday, continuing Thursday’s weak tone, weighed by concerns over the economic recovery, the deteriorating relationship between the U.S. and China and concerns about the timing of the new coronavirus relief bill.
At 7:30 AM ET (1100 GMT), S&P 500 Futures traded 11 points, or 0.3%, lower, Nasdaq Futures down 93 points, or 0.9%. The Dow Futures contract fell 78 points, or 0.3%.
On Thursday, the S&P 500 cash index lost 1.2%, the Dow Jones Industrial Average slumped 1.3%, while the Nasdaq Composite fell 2.3%, its worst day in nearly one month. All three indexes are likely to record a losing week at the close.
Senate Republicans delayed rolling out their roughly $1 trillion coronavirus relief bill until next week, amid differences with the White House, to say nothing of the necessary negotiations with the opposition Democrats who control the House.
This has raised doubts that this relief bill, which includes plans on unemployment insurance and direct cash payments, will be passed before Congress goes on recess in August.
The need for more stimulus was illustrated with Thursday’s rise in unemployment claims, the first time this figure has moved higher since March, suggesting the jobs recovery is stalling.
Meanwhile, Sino-U.S. relations continue to deteriorate after China ordered the United States to close its consulate in the city of Chengdu on Friday, responding to being told to shut its consulate in Houston earlier this week.
At his press briefing on Thursday, U.S. President Donald Trump appeared to prepare the ground for further trade measures against China, saying the spread of Covid-19 meant that the deal "means less" to him than at the start of the year.
The number of Covid-19 cases in the U.S. has now topped 4 million, according to data from Johns Hopkins University, doubling in just six weeks.
Contributing to the negative tone Friday was disappointing news from Dow-component Intel (NASDAQ:INTC), which announced a delay in the rollout of its next generation of semiconductor technology.
The earnings season will continue Friday, with Verizon (NYSE:VZ) and American Express (NYSE:AXP) both beating expectations but unable to avoid sharp drops in profit.
U.S. economic data Friday includes new home sales, at 10 AM ET, which are expected to come in at 700,000 in June, compared with 676,000 in May.
The IHS Markit Manufacturing Purchasing Managers Index also publishes Friday, and is estimated at 51.5 versus the previous 49.8, that is, back in expansion territory.
Oil prices pushed higher Friday, helped by weakness in the U.S. dollar, although demand concerns stemming from rising coronavirus cases and a faltering economic recovery in the U.S., the biggest consumer of crude, have tempered the gains.
At 7:30 AM ET, U.S. crude futures traded 1.1% higher at $41.52 a barrel, while Brent rose 0.3% to $43.45.
Elsewhere, gold futures was flat at 1,890.40/oz, while EUR/USD traded at 1.1590, down 0.1%, having earlier reached a 22-month high.