Market Snapshot: Dow futures hold steady as earnings season kicks off
Stock-index futures were flat to slightly lower Tuesday, pointing to a soft start for Wall Street a day after the S&P 500 index and Nasdaq Composite scored another round of records and as big banks kick off earnings reporting season.
What are major indexes doing?
Futures on the Dow Jones Industrial Average
were down 5 points, or less than 0.1%, at 28,867, while S&P 500 futures
lost 3 points, or 0.1%, to trade at 3,286. Nasdaq-100 futures
lost 10 points, or 0.1%, to trade at 9,078.
on Tuesday rose 83.28 points, or 0.3%, to end at 28,907.05, 0.2% away from its record close of 28,956.90 set on Thursday. The S&P 500
rose 22.78 points, or 0.7%, to finish at 3,288.13, while the Nasdaq Composite
closed at 9,273.93, a gain of 95.07 points, or 1%. Monday’s closing levels marked the third record of the new year for the S&P 500 and the fourth for the Nasdaq.
What’s driving the market?
Wall Street’s big banks were giving earnings season its unofficial kickoff Tuesday, with fourth-quarter results reported ahead of the opening bell from JPMorgan Chase & Co.
and Wells Fargo & Co.
Analysts said the start of earnings season could take the spotlight away from U.S.-China trade issues ahead of the expected Wednesday signing of a so-called phase-one agreement.
China will pledge to buy $200 billion of $US goods over a two-year period in four industries, according to several reports. This includes $75 billion of manufactured goods, $50 billion of energy products, $40 billiion of agricultural products, and $40 billion worth of services. White House trade adviser Navarro also said the deal contains very strong enforcement mechanism, noting the US will be allowed to reimpose tariffs unilaterally if China breaks any commitments (Politico). At the same time, reports also continued to highlight some of the skepticism surrounding the ability to reach a more meaningful phase two deal (SCMP).
The U.S. Treasury late Monday lifted its designation of China as a currency manipulator. News reports that such a move was imminent helped buoy stocks during the session.
China’s yuan has strengthened since late last year, taking back much of the ground lost in a late summer swoon, aided by increased optimism over trade policy as well as early signs the Chinese economy is stabilizing, economists said.
“Markets will be hunting for signs of apprehension over this reporting season with outlooks and sentiment more pressing given where we are valuations-wise,” said Bethel Loh, macro strategist at ThinkMarkets, in a note. “Even if we do catch some subpar results, simply issuing a positive outlook on forward guidance is all of the sugar hit markets need to be swayed to stay long.”
According to FactSet, S&P 500 index company earnings are estimated to have declined 2.0% in the fourth quarter.
What’s on the economic calendar?
The National Federation of Independent Business said its small-business optimism index fell 2 points in December to 102.7.
The economic calendar features the U.S. December consumer-price index at 8:30 a.m. Eastern. Economists surveyed by MarketWatch, on average, look for the index to show a 0.3% rise, while the core reading, which strips out volatile food and energy prices, is expected to show a 0.2% rise.
New York Federal Reserve Bank President John Williams, a voting member of the Fed’s rate-setting panel, is scheduled to deliver a speech at the London School of Economics at 9 a.m. Eastern.
Kansas City Fed President Esther George, who isn’t a 2020 voter, is due to deliver a speech in Kansas City at 1 p.m. Eastern.
Which companies are in focus?
reported earnings that beat Wall Street forecasts. Shares of the Dow component were up 1.8% in premarket action.
Shares of Citigroup Inc.
rose 1.2% in premarket trading Tuesday, after the bank reported fourth-quarter profit and revenue that topped expectations, as strength in its institutional clients group business offset lower-than-expected consumer banking revenue.
Wells Fargo & Co. shares
slid 2.8% in premarket trade Tuesday, after the San Francisco-based lender posted weaker-than-expected profit and revenue for the fourth quarter.
Delta Air Lines Inc.
shares jumped more than 5% in premarket action after topping profit and revenue expectations.
How are other markets trading?
Oil futures bounced higher Tuesday in an effort to snap a five-day losing streak that dragged the U.S. benchmark to its lowest level since early December. West Texas Intermediate crude for February delivery
rose 38 cents, or 0.7%, to $58.46 a barrel, while March Brent
was up 45 cents, or 0.7%, to $64.65 a barrel.
European stocks on Tuesday inched higher on the eve of earnings season. After losses for two straight sessions, the Stoxx Europe 600
edged up 0.12% to 418.89, not far from the record close of 419.74 reached on Dec. 27.
gained 0.7% to 24,025 as traders returned from a holiday Monday. Hong Kong’s Hang Seng Index
slipped 0.2% to 28,885 while China’s CSI 300
index slipped 0.3 pct to 4189.89