FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid
September 20, 2019
By Ambar Warrick and Medha Singh
(Reuters) – U.S. stock indexes were set to open slightly higher on Friday as an interest rate cut by China’s central bank and signs of more co-operation on trade allayed concerns about a slowdown in global growth.
China cut its new one-year benchmark lending rate for the second month in a row on Friday, days after the Federal Reserve and the European Central Bank reduced borrowing costs and left the door open for further monetary stimulus.
U.S. equities were set to end the week fairly unchanged after a rough start, sparked by attacks on Saudi oil facilities. Hopes of additional stimulus calmed investor nerves later in the week, nudging the benchmark S&P 500 closer to its record high hit in July.
“The market does seem to be in a bit of a waiting pattern, looking for indication for whether the economy will gain strength or the alternative indication that we are going to slow further,” said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Market participants are hopeful of a de-escalation in U.S.-China trade tensions as low-level trade talks between the two countries are underway, following tariff concessions last week.
On Thursday, the U.S. Trade Representative’s office said dozens more Chinese products would be excluded from existing tariffs, including dog collars, some printed circuit boards used in computers, certain auto parts and Christmas tree lights.
At 9:01 a.m. ET, Dow e-minis <1YMcv1> were up 66 points, or 0.24%. S&P 500 e-minis <EScv1> were up 6.5 points, or 0.22% and Nasdaq 100 e-minis <NQcv1> were up 26.75 points, or 0.34%.
Markets are likely to become more volatile during Friday’s session on account of “quadruple witching,” as investors unwind interests in futures and options contracts prior to expiration.
Shares of major chipmakers, which have been hit particularly hard by the trade war, rose in premarket trading. Advanced Micro Devices Inc <AMD.O> was up about 0.4%, while Micron Technology Inc <MU.O> rose 1.0%%.
However, chipmaker Xilinx Inc <XLNX.O> dropped 3%% after Chief Financial Officer Lorenzo Flores said he would step down, prompting Bank of America Merrill to downgrade its stock to “neutral”.
Netflix Inc <NFLX.O> slipped 1.1% as Evercore ISI said recent data checks painted an uncertain picture of the streaming service provider’s international subscriber growth.
Roku Inc <ROKU.O> dropped 5.2% after Pivotal Research started coverage of its shares with a “sell” rating.
(Reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Anil D’Silva)
