Wednesday July 17th

17-07-2019

US stock futures are flat as earnings season continues

U.S. stock index futures pointed to a flat open on Wednesday as Wall Street sifts through the latest batch of quarterly corporate results. Around 7:10 a.m. ET, Dow Jones Industrial Average futures indicated a gain of just 12 points. S&P 500 and Nasdaq 100 futures also pointed to an open around the flatline. Bank of America reported better-than-expected earnings on Wednesday, driven by the strength of its retail banking operation. CSX, meanwhile, posted weaker-than-forecast quarterly results. The company also said it expects full-year revenue to fall between 1% and 2%. United Airlines reported earnings and revenue that topped analyst expectations and increased its share buyback program by $3 billion. Cintas shares jumped more than 4% after the First Aid kit maker’s results beat expectations. More than 7% of S&P 500 companies have reported second-quarter earnings thus far, according to FactSet data. Of those companies, about 85% have posted profits that beat analyst expectations. The reported earnings growth of those companies is about 3.1%. Investors came into the earnings season with a bleak outlook on corporate profits. Analysts expected S&P 500 earnings to have fallen by 3% in the second quarter, FactSet data shows. Wednesday’s moves come after stocks posted slight losses in the previous session after President Donald Trump’s skeptical comments on the ongoing U.S.-China trade war. Trump on Tuesday said the world’s two largest economies have a “long way to go” on trade, and suggested that the U.S. could impose sanctions on an additional $325 billion worth of Chinese goods. The comments come just as Washington and Beijing seek to restart negotiations on a trade deal after Trump and Chinese President Xi Jinpingagreed not to escalate tensions, having slapped tariffs on billions of dollars’ worth of each other’s imports over the past year. Construction of new houses fell slightly in June and permits posted an even sharper decline, suggesting the housing market has failed to gain much momentum from lower mortgage rates. U.S. housing starts slipped 0.9% to an annual pace of 1.25 million last month. That’s how many homes would be built in 2019 if construction took place at same rate over the entire year as it did in June. Economists polled by MarketWatch had expected housing starts to drop to a seasonally adjusted 1.24 million rate from a revised 1.27 million in the prior month. Permits to build more homes, meanwhile, dropped 6.1% to a 1.22 million pace, the government said Wednesday. Permits are also about 7% lower compared to the same month a year earlier. Stocks in Asia mostly slipped on Wednesday following overnight developments on the US-China trade front. In mainland China, the Shanghai composite closed 0.2% lower at 2,931.69, while the Shenzhen component added 0.2% to finish its trading day at 9,302.00 . The Shenzhen composite also rose 0.162% to close at 1,574.35. Hong Kong’s Hang Seng index slipped 0.18%, as of its final hour of trading. The Nikkei 225 in Japan fell 0.31% to close at 21,469.18, while the Topix ended its trading day slightly lower at 1,567.41. Over in South Korea, the Kospi declined 0.91% to close at 2,072.92. Oil prices on Wednesday regained little ground lost in the previous session, weighed down by industry data suggesting U.S. crude inventories fell less than expected. West Texas Intermediate crude futures were up 36 cents at $57.98 a barrel. Brent crude futures gained 58 cents to $64.93 a barrel. Both benchmarks had shed more than 3% on Tuesday. Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million barrels, the American Petroleum Institute (API) said on Tuesday. That compared with analyst expectations for a drop of 2.7 million. Gold slipped on Wednesday as the dollar held near a one-week high on the back of better than expected retail sales data from the United States, while investors waited for direction on interest rates from the U.S. Federal Reserve. Spot gold fell 0.3% to $1,401.60 per ounce. Prices were on track for a third straight session of falls as robust data trimmed expectations of an aggressive interest rate cut by the Fed. U.S. gold futures for August delivery shed 0.6% to $1,403.10.