Investing.com - Wall Street futures pointed to a slightly lower open on Monday with appearances by a couple of Federal Reserve (Fed) officials as the main focal points on a light calendar day, as investors begin to prepare for the kick-off of the fourth quarter earnings reporting season at the end of the week.
The blue-chip Dow futures lost 24 points, or 0.12%, by 7:30AM ET (12:30GMT), the S&P 500 futures fell 2 points, or 0.10%, though the tech-heavy Nasdaq 100 futures inched up 1 point, or 0.02%.
Boston Fed President Eric Rosengren and Atlanta Fed President Dennis Lockhart are on tap to give speeches on a day that lacks in major economic reports.
Markets remained unconvinced of the Fed's projection of three rate hikes in 2017. Instead, investors are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool.
The U.S. dollar stood tall against its major rivals on Monday, after the latest U.S. employment report pointed to strong underlying wage growth, suggesting resilience in the labor market and strengthening the case for more rate hikes in the months ahead.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% at 102.36 in early trade.
Most eyes in the currency markets however were on the slump in sterling after comments by British Prime Minister Theresa May on Sunday in her first interview of 2017 were seen as an indication that the U.K. won’t try to negotiate continued full access to the European single market when it leaves the European Union, known as Brexit, as she focuses on securing the Britain’s right to decide its own immigration policies and laws.
The pound reacted by turning sharply lower against the dollar on Monday, with GBP/USD hitting its lowest level since October 28 in early morning trade.
On the company front, a handful of firms such as Acuity Brands Inc (NYSE:AYI), A Schulman Inc (NASDAQ:SHLM), Commercial Metals Company (NYSE:CMC), or Global Payments Inc (NYSE:GPN) will report earnings before the opening bell, while WD-40 Company (NASDAQ:WDFC), Apollo Group Inc (NASDAQ:APOL), VOXX International Corporation (NASDAQ:VOXX) or Barracuda Networks (NYSE:CUDA) are scheduled for after the market close.
However, earnings season won’t kick off in earnest until this Friday from major banks such as JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and PNC Financial (NYSE:PNC).
Analysts expect fourth-quarter earnings will show an increase of 6.1% from a year ago. The S&P financial sector earnings are expected to have the biggest gains, with earnings up 15.7%.
Banks were also in the spotlight on Monday as Goldman Sachs (NYSE:GS) came out with an upbeat report on the sector, lifting price targets on the likes of Bank of America Corporation (NYSE:BAC), Wells Fargo & Company (NYSE:WFC), JP Morgan Chase (NYSE:JPM) , Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), U.S. Bancorp (NYSE:USB_ph) and PNC Financial Services Group (NYSE:PNC).
Shares in Surgcal Care Aff (NASDAQ:SCAI) were likely to see upside on Monday after Dow component UnitedHealth Group (NYSE:UNH) offered to acquire the firm for $57 in cash and stock, an approximately 17% premium to Friday’s closing price, in a deal worth about $2.3 billion.
In other blue-chip news, McDonald’s (NYSE:MCD) entered an agreement to sell 80% of its 2,200 stores in China and Hong Kong to a consortium including Citic Ltd (OTC:CTPCY) and Carlyle Group (NASDAQ:CG).
Meanwhile, oil prices have come under pressure, after Iran and Iraq both reported large export numbers. According to Reuters, Iran has sold over 13 million barrels of crude held at sea over the last three months, undermining attempts by OPEC members to curb supplies.
Additionally, exports from Iraq's Basra region have hit a record high, although the Iraqi oil ministry insisted that it will not affect its commitment to the OPEC production deal.
Indications of increased drilling activity in the U.S. also put downward pressure on crude prices. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 4 to 529, the tenth straight weekly rise and a level not seen in more than a year.
U.S. crude oil futures slumped 1.87% to $53.74 at by 7:31AM ET (12:31GMT), while Brent oil tumbled 1.89% to $56.02.