Wednesday July 18th

18-07-2018

Futures point to a flat open amid corporate earnings, data

U.S. stock index futures pointed to a flat open Wednesday, as investors monitor a flurry of corporate earnings and a fresh batch of economic data. At around 7 a.m. ET, Dow Jones Industrial Average futures rose 5 points, indicating a gain of 11.11 points. Nasdaq 100 and S&P 500 futures were also set to open little changed from the previous session. Morgan Stanley reported better-than-expected earnings and revenue as trade revenue surpassed expectations. Shares of the banking giant rose more than 2.5 percent in the premarket. U.S. Bancorp also posted a stronger-than-forecast profit, sending its stock up by 0.4 percent. Abbott Labs is scheduled to report later on Wednesday. American Express, eBay and IBM were all set to report earnings after the close. So far, the corporate earnings season is off to a good start. With 8.7 percent of S&P 500 having reported, second-quarter earnings for the broad index are up 21.63 percent from the year-earlier period. The moves in premarket trade come shortly after an upbeat assessment on the U.S. economy from Federal Reserve Chairman Jerome Powell. The head of America’s central bank also downplayed the impact of global trade risks on the outlook for future rate hikes. U.S. stocks closed higher Tuesday, as strong gains for Amazon and a rebound in Netflix shares helped to aid a big comeback in the previous session. The Nasdaq composite rose 0.6 percent to hit a record high, while the Dow and S&P 500 also got a boost from robust corporate earnings to close modestly higher. Looking to data, builders broke ground on far fewer homes in June, signalling more of the stop-start rhythm that’s characterized the uneven housing recovery. June’s pace of starts was 12.3% lower than a downwardly-revised May, and 3.0% lower than year-ago levels. Economists surveyed by MarketWatch had forecast a rate of 1.303 million. Permits, which signal future start activity, were at a seasonally adjusted annual 1.273 million pace. Asian shares closed mixed on Wednesday, after firmer gains seen earlier slightly faded — although investors were still assured by the upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony. In Tokyo, the Nikkei 225 rose 0.43 percent, or 96.83 points, to close at 22,794.19, recording its fourth consecutive session of gains. Other major markets in the region finished in negative territory. Over in Seoul, the Kospi gave up early gains, closing lower by 0.34 percent at 2,290.11. Hong Kong's Hang Seng Index reversed gains to slip 0.26 percent by 3:00 p.m. HK/SIN, with energy and materials leading losses, with CNOOC falling 2.55 percent before the market close. China stocks extended losses, with the Shanghai composite slipping 0.35 percent to 2,788.44, marking its fourth straight day of declines. The smaller Shenzhen composite slid 0.75 percent to end at 1,588.12. Those declines came as the Chinese currency touched its lowest levels around two weeks earlier. Oil benchmark Brent crude hit a three-month low on Wednesday after a rise in U.S. crude inventories highlighted increasing global supply and concerns over weak demand. Brent futures fell 93 cents to a low of $71.23 a barrel, its weakest since April 17, before recovering slightly to around $71.63 by 8:30 a.m. ET (1230 GMT). U.S. West Texas Intermediate crude was down 49 cents at $67.59, not far off Tuesday's one-month low of $67.03 per barrel.