BofA’s Hartnett says stay long gold as hedge against U.S. boom and dollar risk
Investing.com - U.S. stock futures point up ahead of the release of key U.S. inflation data that has been postponed by an extended federal government shutdown. A bevy of corporate earnings are also in focus, including figures from carmaker Ford Motor. Elsewhere, U.S. President Donald Trump says he has terminated trade negotiations with Canada because of what he described as a "fraudulent" ad sponsored by the Ontario government, while gold is on track for its first weekly decline in more than two months.
1. Futures rise
U.S. stock futures ticked higher on Friday, as investors assessed a corporate earnings season that is now in full flow and gauged the outlook for trade tensions between the United States and China.
By 03:23 ET (07:23 GMT), the Dow futures contract had gained 59 points, or 0.1%, S&P 500 futures had risen by 15 points, or 0.2%, and Nasdaq 100 futures had climbed by 88 points, or 0.4%.
The main averages on Wall Street ended in the green on Thursday, buoyed largely by President Donald Trump’s confirmation that he will meet with Chinese counterpart Xi Jinping in South Korea later this month.
In individual stocks, electric vehicle giant Tesla rose by 2.3%, rebounding from earlier losses, as traders eyed both record quarterly sales and profit which underwhelmed expectations. Still, some analysts remained focused not on Tesla’s car business, but on its ambitions in areas like autonomous driving and humanoid robots.
Shares of T-Mobile dipped despite the telecom operator notching better-than-expected third-quarter wireless subscriber additions. Elsewhere, Honeywell’s aerospace unit powered an upgrade in the conglomerate’s annual guidance, giving lift to the stock.
2. CPI ahead
Markets are now gearing up for the release of the U.S. consumer price index for September following a multi-week delay to the numbers because of an extended federal government shutdown.
Headline inflation in the 12 months to September is tipped to stand at 3.1%, compared to 2.9% in August. Month-on-month, it is expected to equal August’s pace of 0.4%.
Stripping out volatile items like food and fuel, so-called “core” CPI is projected to come in at 3.1% year-over-year and 0.3% on a monthly basis.
Washington’s closure, linked to an impasse in Congress over a funding bill, has led to the postponement of several official economic indicators. Crucially, this has deprived officials at the Federal Reserve of key readings used to calibrate monetary policy ahead of the central bank’s next meeting on October 28-29.
Inflation has been one of the major focal points for policymakers prior to the gathering, especially with pre-shutdown data suggesting that price pressures have remained sticky. Yet the Fed has largely prioritized signs of slowing employment growth, citing the trend as a motive behind its decision to slash interest rates by 25 basis points at its last meeting in September.
Another quarter-point reduction is anticipated in October and one more is seen coming at the Fed’s final gathering of the year in December, according to CME’s FedWatch Tool. But, without a bevy of up-to-date economic figures, some murkiness has continued to surround the Fed’s rate path.
3. Ford earnings
Shares of Ford Motor ticked up in extended hours trading after the carmaker posted quarterly income which topped expectations thanks to strong demand for its SUVs and pickup trucks.
Net income jumped to $2.4 billion, versus $900 million a year earlier. Per-share, earnings during Ford’s third quarter were $0.45, above LSEG estimates of $0.36 cited by Reuters.
The company is now turning its attention to hopes for a mitigated impact from sweeping U.S. tariffs, with Trump recently approving an order to expand tax credits for U.S. auto and engine production. Executives said that the levies will now cost the business $1 billion, down from a prediction of $3 billion in July, because of the tariff relief.
CFO Sherry House said Ford would have raised its annual financial forecast, but was ultimately forced to slash the outlook because of a fire at a critical aluminum supplier. The fire a few weeks ago at the Novelis factory in Oswego, New York -- which supplies materials for Ford’s popular F-150 trucks -- is expected to hit output through the end of the year and lead to expenses of $1.5 billion to $2 billion before taxes and interest.
Although Ford CEO Jim Farley said progress was being made in offsetting these expenses, the firm brought down its full-year outlook for the second time this year. Before taxes and interest, income is seen at $6 billion to $6.5 billion, from $6.5 billion to $7.5 billion previously.
4. Trump says he is terminating trade talks with Canada
Trump has said all trade negotiations with Canada have been terminated, citing what he described as a “fraudulent” advertisement sponsored by the Ontario government involving late President Ronald Reagan.
“Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED,” Trump wrote in a post on his social media platform Truth Social, emphasizing that tariffs were vital to U.S. national security and the economy.
Trump claimed that Canada had used a "FAKE" ad featuring Reagan speaking negatively about tariffs, adding that he believed it was created to “interfere with the decision of the U.S. Supreme Court, and other courts" as they assess the legality of the duties.
Since shortly after returning to the White House in January, Trump has targeted Canada in a series of trade disputes. The White House initially slapped tariffs on the country over what it said was a lack of action taken to combat drug smuggling -- but the levies were later softened, with exemptions put in place for items covered by the U.S.-Mexico-Canada Agreement, a trade deal signed during Trump’s first term. Tariffs have also been imposed on Canadian steel, aluminum, lumber and automobiles as part of what the Trump administration has called a drive to reinforce national security.
Canadian Prime Minister Mark Carney held in person talks with Trump two weeks ago, although the discussions failed to yield a solid agreement.
5. Gold on pace for first weekly decline in 10
Gold prices were headed for their first weekly decline in 10, as investors locked in profits after recent record highs and awaited the U.S. inflation data due later in the day.
Spot gold was last down 0.8% at $4,092.79 an ounce by 03:24 ET, while U.S. gold futures fell 0.9% to $4,106.76.
Despite touching an all-time peak earlier in the week, bullion has now slipped by more than 3% so far this week, putting it on track for its largest weekly dip since November 2024.
Hopes that the meeting between Trump and Xi could ease a trade fight between the world’s two largest economies has taken some of the shine off of gold’s safe-haven appeal, while a strengthening in the U.S. dollar has made buying the yellow metal more expensive for foreign currency holders.
But analysts have said a muted CPI reading on Friday could further cement expectations for a Fed rate cut this month and in December, possibly bolstering gold. The precious metal tends to perform better in low borrowing cost environments, because it reduces the opportunity cost of holding non-yielding bullion.