Futures point to a positive open
U.S. stock futures were higher in pre-market trade on Friday, ahead of the expiration of several types of equity derivatives contracts.
By 5:30 a.m. ET, the blue-chip Dow futures indicated a gain of 236 points, or 0.91% to 26,135. S&P 500 futures rose 25.48 points, or 0.82% to 3,123.38 while the tech-heavy Nasdaq 100 futures were up 76.5 points, or 0.77% to 10,059.5.
Today is quadruple witching day, with contracts for stock index futures, stock options, single stock futures and stock index options all expiring on the same day and big players unwinding their positions.
Quadruple witching day happens 4 times a year, on the third Friday in March, June, September, and December. The expirations can sometime heighten volatility across the market, particularly near the closing bell.
China to ramp up purchase of U.S. farm goods
Meanwhile, Bloomberg says that Chinese officials plan to accelerate purchases of American agricultural products to comply with the phase one trade agreement after buying fell behind because of “coronavirus disruptions.”
A source told the news outlet that China will increase its purchases of “everything from soybeans to corn and ethanol” following talks in Hawaii this week. In the phase one deal, Chinese officials promised to buy $36.5 billion worth of U.S. farm products, but they bought less than $5 billion through April.
U.S. Secretary of State Michael Pompeo also said in a tweet Thursday that CCP (Chinese Communist Party) Politburo Member Yang Jiechi “recommitted to completing and honoring all of the obligations of Phase 1 of the trade deal between our two countries.”
Crude rises as OPEC+ members pledge cut compliance
Crude future also traded higher early Friday after oil producer group OPEC and its partners pledged better compliance with record output cuts in a meeting Thursday.
As of writing, U.S. West Texas Intermediate (WTI) crude futures were at $40.01, up $1.17, or 3.01% a barrel. International Brent crude futures were up $1.07, or 2.58% to $42.58 a barrel.
Reuters reported that during the meeting, Kazakhstan and Iraq vowed to comply better with cuts. The alliance earlier this month agreed to extend its record curbs of 9.7 million barrels per day through July, to prop up prices hurt by the COVID-19 pandemic.
