Wednesday August 21st

21-08-2019

Dow futures rise more than 190 points after strong retail earnings

U.S. stock index futures moved higher on Wednesday as strong quarterly results from retailers such as Target and Lowe's lifted investor sentiment. Around 7 a.m. ET, Dow Jones Industrial Average futures were up 193 points, indicating a gain of 168 points at the open. S&P 500 and Nasdaq 100 futures also pointed to solid gains. Target shares surged more than 17% in the premarket after the retailer posted second-quarter results that topped analyst expectations. The company's same-store sales, a key metric for retailers, expanded by 3.4%. Analysts expected growth of 2.9%. Lowe's jumped around 12% on its second-quarter earnings report. CEO Marvin Ellison said the company capitalized on strong "holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results." Wall Street closed lower for the first time in four sessions on Tuesday amid lingering worries over the economy. Investors have been rushing into safer assets such as gold and Treasurys as they fear U.S. economic growth could slow down with the rest of the world. For the month, the Dow is down more than 3% entering Wednesday's session. The S&P 500 and Nasdaq Composite are down more than 2% each. Investors on Wednesday looked ahead to the release of the minutes from the Federal Reserve's meeting in July as they search for any clues on monetary policy. The Fed cut rates by 25 basis points in July, while signaling that it was only a "midcycle adjustment" and the central bank was not returning to the stimulus era. Meanwhile, U.S. President Donald Trump has made new comments about the trading relationship with the European Union. "Dealing with the European Union is very difficult," Trump told reporters at the White House. "We have all the cards in this country because all we have to do is tax their cars and they'd give us anything we wanted because they send millions of Mercedes over. They send millions of BMWs over," he added. Trump is due to meet with other EU leaders this week at the G-7 meeting in France. Asia markets largely declined Wednesday after U.S. indexes pulled back overnight on recession fears. Some analysts said the selloff in stocks pointed to “deep-seated worries” among investors. Japan’s Nikkei 225 dropped 0.28% to 20,618.57, retracing some of its earlier losses, and the Topix index declined 0.61% to 1,497.51. In South Korea, the Kospi index erased losses to trade 0.22% higher at 1,964.65. Hong Kong’s Hang Seng index rose about 0.2% in late afternoon trade. The Shanghai composite on mainland China was fractionally higher at 2,880.33 while the Shenzhen composite was down about 0.1%. The onshore Chinese yuan traded at 7.0591 against the dollar after the People’s Bank of China set the daily midpoint rate at 7.0433, slightly stronger than a Reuters estimate. Crude oil futures rose on Wednesday after industry data showed a larger than expected drop in U.S. crude inventories, but gains were capped by lingering worries about a possible global recession. Brent crude had gained 1.5%, to $60.93 a barrel, after settling 0.5% higher on Tuesday, while U.S. crude was up 1%, at $56.69 a barrel. Gold prices eased on Wednesday to hover around the $1,500 level as investors turned cautious ahead of minutes from the U.S. Federal Reserve’s last meeting, which is expected to shed more light on interest rate cuts. Spot gold was down 0.5% at $1,499.18 per ounce by 0948 GMT, with analysts also attributing the dip to profit-booking following the metal’s recent strong run, which saw it gain more than $80 this month. U.S. gold futures slipped 0.4% to $1,509.70.