Markets Could Capitalize On Rebounding Oil, Waning Brexit Jitters

(RTTNews) - The major U.S. index futures are pointing to a higher opening on Friday, with sentiment reflecting uneasiness as global economic risks heighten amid the looming Brexit threat. However, equities may find an able ally in oil, which is up close to $1-a-barrel after yesterday's pullback. However, the rest of the commodities are lower and the dollar is also weaker in the aftermath of the Fed refraining from hiking the Fed rate in June. A Commerce Department report released a short while ago showed that housing starts remain robust despite May's retreat. With Brexit fears subsiding, European stocks are also rallying.   U.S. stocks snapped a 5-session losing streak on Thursday, as bargain hunting lifted the markets post the central bank decisions of the week.    The major averages opened lower and fell further in early trading. Subsequently, the averages trimmed their losses over the course trading, with the averages moving into positive territory by late afternoon trading. Thereafter, the averages moved steadily higher, ending modestly to moderately higher.    The Dow Industrials added 92.93 points or 0.53 percent before ending at 17,733, while the S&P 500 Index closed 6.49 points or 0.31 percent higher at 2,078 and the Nasdaq Composite ended at 4,845, up 9.98 points or 0.21 percent.    Twenty-six of the thirty Dow components closed higher for the session, while four stocks declined.  DuPont (DD), General Electric (GE), 3M Company (MMM), Merck (MRK), Microsoft (MSFT), UnitedHealth (UNH), Verizon (VZ) and Exxon Mobil (XOM) were among the biggest gainers of the session but Nike (NKE) fell steeply.    Among the sectors, gold, airline and oil service stocks came under selling pressure.    On the economic front, the Labor Department reported that jobless claims rose to 277,000 in the week ended July 11th from 264,000 in the previous week. Economists expected claims to come in at 270,000. The four-week average slipped to 269,250 from 269,500. Continuing claims calculated with a week's lag rose 45,000 to 2.157 million in the week ended June 4th.    The results of the Philadelphia Federal Reserve's manufacturing survey showed that business activity rebounded by much more than expected in June. However, the inner details weren't very encouraging. The diffusion index of business activity rose to 4.7 in June from -1.8 in May, above the expected reading of 0.8.     The new orders index worsened to -3 from -1.9, the shipments index declined to -2.1 from -0.5 and the unfilled orders index moved down to -12.6 from -8.8. The employment indexes were weak, with the number of employees index slipping to -10.9 from -3.3, while the average workweek index was at -13.1, despite rising from -15.1. The 6-month outlook index declined to 29.8 from 36.1.     The National Association of Home Builders reported that its housing market index, measuring confidence among homebuilders, rose to 60 in June from 58 in May. Economists expected a reading of 59. The future sales conditions index rose 5 points to 70, the present sales conditions index was up 1 point at 64 and the index measuring prospective buyer traffic climbed 3 points to 47.      A report released by the Labor Department showed that consumer prices rose 0.2 percent month-over-month in May, below the 0.3 percent rate expected by economists and the 0.4 percent increase in April. Core consumer prices were up 0.2 percent, matching April's pace and the consensus estimate. Annually, consumer and core consumer prices climbed 1 percent and 2.2 percent, respectively.    Currency, Commodity Markets    Crude oil futures for July delivery are advancing $0.98 to $47.19 a barrel after declining $1.80 to $46.21 a barrel on Thursday.  Gold futures are currently trading at $1,29.90 an ounce, down $6 from the previous session's close of $1,298.40 an ounce. On Thursday, gold rose $10.10.

On the currency front, the U.S. dollar is trading at 104.34 yen compared to the 104.26 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1250 compared to yesterday's $1.1225.   Asia    The major Asian markets rebounded, encouraged by the late-recovery on Wall Street overnight. Oil's gains also supported sentiment.    The Japanese market rallied strongly as the yen appreciation stalled. The Nikkei 225 average opened higher and moved roughly sideways for the rest of the session, as it ended up 165.52 points or 1.07 percent at 15,600.    Most sectors advanced, led by exporters. On the other hand, real estate, rail utilities and some telecom, food and oil stocks moved to the downside.    Australia's All Ordinaries held above the unchanged line throughout the session before ending up 16.60 points or 0.32 percent at 5,248. Financial, IT and industrial stocks moved solidly higher and real estate and material stocks also saw some strength. However, telecom, energy, utility, telecom and consumer stocks lost ground.    Hong Kong's Hang Seng Index ended at 20,170, up 131.56 points or 0.66 percent, and China's Shanghai Composite Index added 12.29 points or 0.43 percent before ending at 2,885.    Europe    European stocks are advancing after declining in the previous session, with bargain hunting facilitated by receding Brexit fears offering support.    The shooting of U.K. MP Jo Cox, who was campaigning for a 'remain' vote had led to the suspension of campaigns by both camps, namely 'remain' and 'leave,'    On the economic front, data released by the European Central Bank showed that the current account surplus of the euro area came in at a seasonally adjusted 36.2 billion euros in April compared to 26.3 billion euros in March. The trade surplus improved in the month, while the services surplus declined.     U.S. Economic Reports    New residential construction in the U.S. saw a modest decrease in the month of May, according to a report released by the Commerce Department.

The report said housing starts edged down by 0.3 percent to an annual rate of 1.164 million in May from the revised April estimate of 1.167 million. Economists had expected housing starts to dip to a rate of 1.150 million from the 1.172 million originally reported for the previous month.   Stocks in Focus    Oracle (ORCL) reported fourth quarter adjusted earnings that trailed estimates but its revenues exceeded estimates.    Smith & Wesson (SWHC) reported above-consensus adjusted earnings from continuing operations and revenues for its fourth quarter. The company's first quarter and 2017 guidance is positive.    Finisar's (FNSR) fourth quarter non-GAAP earnings exceeded estimates and its revenues rose year-over-year. The company's first quarter guidance is upbeat.    Comtech (CMTL) announced that it has priced its public offering of 7.145 million shares at $14 per share, a discount to the $16.11 at which closed on Thursday. The company expects gross proceeds of about $100 million from the offering.    In an analyst and investor day meet, MGM Resorts (MGM) said it now expects adjusted EBITDA benefit of $400 million by the end of 2017, up from its earlier target of $300 million.    Perrigo (PRGO) announced that it has received final FDA approval for the generic version of Mallinckrodt Pharma's Ofirmev injection 1000 mg/100 ml. The company can now launch a generic version of the injection on December 6th, 2020 or earlier under certain circumstances.