US pre-open: Futures point to pause in November rally

(Sharecast News) - US futures were pointing to modest losses ahead of the bell on Tuesday as major indices look set to halt their recent rally. As of 1250 GMT, Dow Jones futures were down 0.28%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.29% and 0.20% weaker, respectively.

The Dow closed 34.54 points higher on Monday, extending gains recorded in the previous session following a catalyst-free session for major indices.

However, Wall Street seems set to put its latest run of solid gains on ice prior to the open after all three major indices delivered their best week of the year last week - in direct contrast to October when the S&P 500 slipped into correction territory - after the Federal Reserve left interest rates unchanged.

The yield on the benchmark ten-year Treasury note was fractionally lower at 4.636%, while its two-year counterpart was changing hands only marginally higher at 4.945%.

Energy prices hit a two-month low after Chinese trade and German manufacturing data highlighted a waning demand picture, with West Texas Intermediate down 1.63% at $79.50 a barrel and Brent Crude losing 1.78% at $83.66 per barrel.

Scope Markets' Joshua Mahony said: "We are starting to see crack appear in the bullish theme that dominated last week, with US markets pointing towards a likely pullback as they follow their European counterparts lower. Just as the RBA has signalled concerns over the length of time it could take to bring inflation down to target, the optimism over an end to Fed tightening will likely be tempered by the reality over how long this normalization of price pressures could take.

"While recent central bank meetings have helped lift spirits as we potentially leave the tightening phase behind us, this may not necessarily justify an all-out return to optimism quite yet. As such, the latest rally instead leaves markets somewhat exposed to another period of selling pressure."

On the macro front, goods trade balance data for September will be published at 1330 GMT, while Federal Reserve bankers Neel Kashkari, Austan Goolsbee, Christopher Waller, John Williams, and Lorie Logan will all deliver speeches throughout the course of the day.

In terms of earnings, DR Horton will publish earnings before the opening bell, while H&R Block, eBay, GoPro, and Uber were all slated to report their latest quarterly numbers after the close.





Reporting by Iain Gilbert at Sharecast.com