Tuesday August 20th

20-08-2019

The stock market’s comeback is set to pause with futures flat

U.S. stock index futures were little changed on Tuesday as Wall Street’s rebound from last week’s sell-off was set to pause. Around 7 a.m. ET, Dow Jones Industrial Average futures indicated a drop of less than 20 points at the open. Futures on the S&P and Nasdaq were both nearly flat. Home Depot kept losses in check before the bell. The home improvement retailer reported better-than-expected earnings on Tuesday, sending its stock up 1% in the premarket. However, Home Depot warned tariffs could hit consumer spending and cut its full-year revenue outlook. Wall Street rose sharply on Monday as a rebound in bond yields continued, easing ongoing recession fears. The White House has also stepped in the ongoing debate over whether the U.S. economy will soon enter into recession mode. Nonetheless, The Washington Post and New York Times both reported the Trump administration was discussing a cut to payroll taxes as a way to mitigate slower economic growth. A White House official pushed back on the reports, saying cutting payroll taxes “is not something under consideration at this time. ” Traders remain focused on U.S.-China trade relations, after the U.S. Commerce Secretary Wilbur Ross announced Monday that it was extending by another 90 days a temporary reprieve for Huawei to do business with American firms. The U.S. added another 46 Huawei affiliates onto the blacklist. Meanwhile, traders will also be keeping an eye on the broader economy. On Wednesday, the Federal Reserve is scheduled to publish its latest meeting minutes. Investors are also likely to closely monitor the Fed’s Jackson Hole seminar and a G7 summit later in the week for clues on monetary policy settings. On the data front, the Philly Fed non-manufacturing numbers will be out at 08:30 a.m. ET. Stocks in Asia were mixed on Tuesday, as the People’s Bank of China published its new loan prime rates which would result in cheaper borrowing costs for companies. Mainland Chinese stocks were mixed on the day, with the Shanghai compositeshedding earlier as it slipped 0.11% to about 2,880.00. The Shenzhen component was flat at 9,328.73, while the Shenzhen composite added 0.137% to approximately 1,574.12. In Japan, the Nikkei 225 rose 0.55% to close at 20,677.22, while the Topix index added 0.83% to finish its trading day at 1,506.77. Over in South Korea, the Kospi gained 1.05% to end its trading day at 1,960.25. In Hong Kong, the Hang Seng index returned to negative territory, slipping about 0.3% as of its final hour of trading. Oil prices rose on Tuesday on optimism U.S.-China trade tensions will ease and on hopes major economies will take stimulus measures to ward off a potential economic slowdown that could hit oil demand. Brent crude was up 25 cents to $59.99 a barrel by 0904 GMT while U.S. crudewas up 19 cents at $56.40 a barrel. Gold prices recovered to over $1,500 an ounce on Tuesday, following the previous session’s steep fall, as focus turned to U.S. Federal Reserve policy statements and growth concerns. Spot gold was up 0.66% to $1,504.91 per ounce, after falling to a near one-week low of $1,492.10 on Monday. U.S. gold futures gained 0.25% to $1,515.3.