Dow futures fall 60 pts; banks, jobless claims and housing starts in focus

By Peter Nurse    

Investing.com -- U.S. stocks are seen opening mixed Thursday, as investors digested the moves to support embattled lender Credit Suisse amid concerns about the potential impact of the regional banking crisis on the U.S. economy.

At 07:00 ET (11:00 GMT), the Dow Futures contract was down 60 points, or 0.2%, S&P 500 Futures traded 9 points, or 0.2%, lower, while Nasdaq 100 Futures climbed 10 points, or 0.1%.

Credit Suisse (SIX:CSGN) announced overnight that it had secured a CHF 50 billion ($1 = CHF 0.9266) support line from the Swiss National Bank, making sure there was no risk of contagion to this systemically important bank from the volatility in the U.S. banking system. 

This news helped the European banking sector post gains Thursday and should dilute some of the current unease on Wall Street that resulted in the blue chip Dow Jones Industrial Average falling over 280 points, or 0.9%, on Wednesday.

That said, concerns exist that small and mid-sized U.S. banks could still rein in lending to preserve liquidity following the swift collapse of three regional banks, including SVB Financial Group, hindering economic growth.

With no offset from larger banks, gross domestic product could reduce by 0.5% to 1.0%, over the next year or two, said analysts at JPMorgan, while Goldman Sachs raised its probability of the U.S. economy entering a recession in the next 12 months to 35%, from 25%.

The ongoing difficulties in the banking sector have shifted sentiment regarding the outcome of next week's Federal Reserve policy meeting. About half of the traders are betting on a quarter of a percentage point increase, while the other half are betting on a pause. 

This marks a big difference from last week when most traders expected the Fed to hike by 50 basis points as inflation remained elevated. 

Ahead of next week’s meeting investors can study weekly initial jobless claims and housing starts data for February, both at 08:30 ET (12:30 GMT).

In corporate news, logistics giant FedEx (NYSE:FDX) and retail discount chain Dollar General (NYSE:DG) are scheduled to report earnings later Thursday.

Snap (NYSE:SNAP) and Meta Platforms, the owner of Facebook (NASDAQ:META), gained premarket on talk that the Biden administration could ban ByteDance-owned TikTok from the U.S. if the Chinese owners don’t divest their stakes in the popular video app.

Adobe (NASDAQ:ADBE) stock rose over 6% premarket after the software company lifted its annual guidance Wednesday after reporting better-than-expected fiscal first-quarter results, driven by growth in its core digital media business.

Oil prices traded higher Thursday, rebounding from 15-month lows as the financial lifeline to Credit Suisse helped boost risk sentiment, diluting concerns that a full-blown banking crisis would stymie global economic activity.

By 07:00 ET, U.S. crude futures traded 0.8% higher at $68.14 a barrel, while the Brent contract rose 0.8% to $74.30. 

Both benchmarks have slumped around 10% this week, falling to their lowest levels since December 2021.

Additionally, gold futures fell 0.2% to $1,926.70/oz, while EUR/USD traded 0.4% higher at 1.0614.