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Jan 17, 2017

U.S. Stock Market Future Indications - January 17, 2017: Wall Street Stocks Set for a Lower Open, With Investors Rattled by Trump, Brexit

marketwatch.com
 
Barbara Kollmeyer
 
Wall Street’s postholiday return to action was setting up to be a weak one, as U.S. stock futures pitched lower after comments from President-elect Donald Trump and on expectations the U.K. will press for a “hard Brexit.”


Corporate results are expected from Morgan Stanley and UnitedHealth Group Inc. ahead of the open.
Extending earlier losses, Dow Jones Industrial Average futures YMH7, -0.18%  fell 100 points, or 0.5% to 19,732, while S&P 500 index futures ESH7, -0.31%  dropped 12.50 points, or 0.6%, to 2,260. Nasdaq-100 ESH7, -0.31%  futures lost 26 points , or 0.5%, to 5,035.

U.S. markets will reopen after Monday’s shutdown to commemorate the Martin Luther King Jr. holiday.

On Friday, U.S. stocks finished a lackluster week largely in the red, with the Dow industrials DJIA, -0.03%  finishing 0.4% lower and the S&P 500 SPX, +0.18%  easing 0.1%. The Nasdaq Composite Index COMP, +0.48%  rose 1% for the week, after ending at 5,574.12 for its sixth all-time closing high in seven sessions.

Stocks have been pulling back as postelection euphoria fades. Recent comments from Trump on topics ranging from China to Russia, to auto makers, have been rattling investors across the globe.

See: How Trump can be a great president
And: German minister tells Trump ‘the U.S. needs to build better cars’
 
Ahead of a speech Tuesday from British Prime Minister Theresa May, who is expected to push for a “hard Brexit,” investors were finding little reason to take on more risk in the form of global stocks or the dollar.

Read: Stocks may need a flawless earnings season to keep Trump rally going
The Japanese yen USDJPY, -0.59%  , attractive to investors at times of global uncertainty, rose to ¥113.02 against the dollar, from ¥114.17 late Monday in North America.

Trump told The Wall Street Journal in an interview that published Friday the U.S. dollar was “too strong” because China was keeping its own yuan weaker. “Our companies can’t compete with them now because our currency is too strong, and it’s killing us,” the president-elect said in the interview.
“As a result we are seeing a further unwind of the ‘long USD’ position that has dominated since the election,” said Chris Beauchamp, chief market analyst at IG, in reference to Trump’s dollar comments.

Another perceived safe-haven asset, gold GCG7, +1.35%  , shot up $21, or 1.8%, to $1,217.20 an ounce, after closing above the key $1,200-an-ounce level.

May is expected to say the U.K. will definitively leave the EU’s single market, and not “seek to hold on to bits of membership as we leave,” according to excerpts of a speech released by her office on Monday. The speech is expected at 11:45 a.m. London time, or 7:45 a.m. Eastern Time.


Donald Trump will offer the U.K. a quick and fair trade deal, the president-elect said in an interview with The Times newspaper.
Economic docket: Away from politics, the Empire state index for January is due at 8:30 a.m. Eastern Time.
Federal Reserve officials scheduled to speak include New York Fed President William Dudley at 8:45 a.m. Eastern, Fed Gov Lael Brainard at 10 a.m. Eastern, and San Francisco Fed President John Williams at 5 p.m. Eastern.
Read: Some fear Trump will knock out economy as others predict a modest boost
Stocks to watch: Earnings are due from UnitedHealth UNH, -0.34%  and Morgan Stanley MS, +0.41%   ahead of the open. Expectations for financial stocks remain high after J.P. Morgan Chase & Co. JPM, +0.53%  delivered upbeat results last week.
See: Stocks may need a flawless earnings season to keep the Trump rally going.
Shares of Clayton Williams Energy Inc. CWEI, -2.27%  shot up 32% in thin, premarket trading after oil producer Noble Energy Inc. NBL, +0.56%  said it will pay $2.7 billion to buy its smaller rival. Noble Energy shares were inactive.
British America Tobacco PLC BATS, -0.67%  said it will pay $49.4 billion for the 57.8% of Reynolds American Inc. RAI, +0.41%   that it doesn’t own. Shares of Reynolds rose 3% in premarket trading.
General Motors Co. GM, -0.45%   shares may be active, as the car maker is expected to this week announce plans to invest at least $1 billion in several U.S. factories. The move comes after Trump lobbed criticism at GM over its Mexican auto imports.
Read: German minister tells Trump: ‘The U.S. needs to build better cars’
Other markets: The FTSE 100 index UKX, -0.67%  eased 0.4% as investors grappled with the likelihood of a hard Brexit, while stocks across the rest of Europe SXXP, -0.13%  also weakened. In Asia ADOW, +0.34%  , the Nikkei 225 index NIK, -1.48%  slid 1.5%, weighed by global political jitters and a strong yen that weighed on shares of exporters.
Oil prices CLG7, +1.53%  were bid higher, with February crude up 90 cents, or 1.7%, to $53.27 a barrel.