Wednesday December 18th

18-12-2019

US stock futures little changed, FedEx shares drop on earnings miss

U.S. stock index futures were little changed on Wednesday after Wall Street notched its fifth straight gain as investors digested weak earnings from shipping giant FedEx. At around 6:50 a.m. ET, Dow Jones Industrial Average futures traded just 12 points higher, indicating a gain of 14 points at the open. Futures on the S&P 500 and Nasdaq 100 were both slightly higher. On Tuesday, the S&P 500 posted its longest winning streak since November and had a record closing high along with the Dow and Nasdaq. However, Wall Street headed for a slow start to the session after FedEx shares dropped more than 7% on disappointing quarterly numbers. The company’s earnings and revenue missed analyst expectations. FedEx also cut its guidance for the rest of its fiscal year. “We anticipate some of the aforementioned headwinds to abate and F2H20 to be a period of moderate improvement,” said Oppenheimer analyst Scott Schneeberger in a note. “However, with Express/Ground margins well below historical trend, we anticipate FedEx to be a “show me” story for multiple quarters.” Stocks broke out to new records last week after President Donald Trump and Chinese officials announced that the world’s two largest economies had agreed on a so-called “phase one” deal. It is understood that Beijing agreed to billions of dollars in agricultural purchases from the U.S., while Trump said he would not move ahead with a new round of planned tariffs, among other items. The deal, which is not yet signed, is set to be confirmed in the first week of January, according to U.S. Trade Representative Robert Lighthizer. Markets in Asia mostly fell by the close on Wednesday afternoon, as risks of a no-deal Brexit ramped up again overnight. In mainland China, the Shanghai composite was down 0.18% to close at 3,017.04, while the Shenzhen composite closed flat to 1,709.44. The Shenzhen component lost 0.11% to 10,294.66. Hong Kong’s Hang Seng index was down 0.12% in its final hour of trade. Japan’s Nikkei 225 lost 0.55% to close at 23,934.43, while the Topix slumped 0.50% to 1,738.40. Over in South Korea, the Kospi declined 0.25% to 2,194.76. Oil prices fell on Wednesday after U.S. industry data showed a surprise build in crude inventories, but expectations for firmer demand next year prevented a bigger fall in prices. The decline followed a gain of more than 1% in the previous session as the “phase one” U.S.-China trade deal announced last week eased pressure on the oil benchmarks. Prior to the deal, oil markets were hampered by worries over the economic impact of the trade dispute between the world’s two biggest oil consumers. Brent crude futures dropped 26 cents to $65.84 a barrel. The international benchmark rose 1.2% to $66.10 a barrel on Tuesday. West Texas Intermediate crude futures fell 44 cents, or 0.71%, to $60.50 per barrel. Gold edged higher on Wednesday amid uncertainty about what comes after phase one of the U.S.-China trade deal, while palladium slipped after a record run to the key $2,000 an ounce level. Spot gold gained 0.1% to $1,476.65 per ounce. U.S. gold futures rose 0.1% at $1,481.20.