U.S. Stocks May Lack Direction Ahead Of Warsh Speech

(RTTNews) - After ending the previous session mostly higher, stocks may show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by less than a tenth of a percent.

Traders may be reluctant to make significant moves ahead of Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole economic symposium later this morning.

While Warsh has refrained from providing forward guidance for monetary policy, traders are still likely to pay close attention to his remarks for clues about the outlook for interest rates.

"I do not expect Chair Warsh to provide a roadmap for upcoming policy meetings," said Jeffrey Roach, Chief Economist for LPL Financial. "Investors should focus on how he connects inflation, productivity, and the bond market."

He added, "If the speech itself is short on specifics, the references and citations may offer the clearest clues about where the new Fed chair intends to take the institution."

Ahead of Warsh's remarks, CME Group's FedWatch Tool currently indicates a 64.3 percent chance the Fed will leave interest rates unchanged next month and a 35.7 percent chance of a quarter point rate hike.

Nonetheless, the central bank is still widely expected to raise interest rates by at least one quarter point before the end of the year.

Not long after the start of trading, MNI Indicators is due to release its report on Chicago-area business activity in the month of August. The Chicago business barometer is expected to rise to 59.0 in August from 57.6 in July, with a reading above 50 indicating growth.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of August. The consumer sentiment index for August is expected to be unrevised from the preliminary reading of 51.0, which was down from 55.2 in July.

After showing a notable upward move in morning trading on Thursday, stocks fluctuated in the afternoon but managed to end the day firmly positive. The tech-heavy Nasdaq showed a particularly strong move to the upside.

The Nasdaq jumped 411.16 points or 1.6 percent to 26,541.35 and the S&P 500 advanced 55.29 points or 0.7 percent to 7,730.99. The narrower Dow posted a more modest gain, rising 105.56 points or 0.2 percent to 53,569.44.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's Nikkei 225 Index climbed by 0.4 percent, while China's Shanghai Composite Index edged down by 0.1 percent and South Korea's Kospi slump by 1.8 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index is up by 1 percent, the German DAX Index is up by 0.6 percent and the U.K.'s FTSE 100 Index is up by 0.1 percent.

In commodities trading, crude oil futures are sliding $0.73 to $82.80 a barrel after jumping $1.30 to $83.53 a barrel on Thursday. Meanwhile, after rising $10.70 to $4,664 an ounce in the previous session, gold futures are falling $18.20 to $4,645.80 an ounce.

On the currency front, the U.S. dollar is trading at 159.62 yen versus the 159.39 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1640 compared to yesterday's $1.1651.