Thursday November 15th

15-11-2018

Dow set to inch lower despite better-than-expected Walmart, Cisco earnings

U.S. stock-index futures pointed to a slightly lower open Thursday morning despite better-than-expected earnings results from Walmart and Cisco. At around 8:40 a.m. ET, Dow futures were up 16 points, implying a lower open of 9 points. Nasdaq and S&P 500 futures were pointing to a mixed open. A number of strong corporate earnings results buoyed U.S. equities Thursday morning as better-than-expected profit at both Cisco and Walmart lifted market sentiment. Cisco shares rallied 4.5 percent before the bell after the tech giant beat on both the top and bottom lines for the first fiscal quarter. The San Jose, California-based Cisco reported revenue rose 7.7 percentas it takes action to mitigate the impact any future impact from the Trump administration's trade dispute with China. So far, it remains one of a handful of technology companies that has not seen headwinds as a result of tariffs between the two economic powerhouses, according to CEO Chuck Robbins. "I can just tell you personally, I haven't had one conversation with any customer around the tariffs at this point," Robbins said during the company's earnings call. "Secondly, I think that once we got past the midterms, we've begun to hear some positive, at least, headlines relative to the discussions, and I remain fairly optimistic that this has become a top priority for the administration, and we're hopeful that they'll come to some agreement before we move to anything more significant." Other major technology stocks rallied in the wake of Cisco's performance, with Amazon, Apple and Netflix all up at least 0.5 percent in premarket trading. Sentiment across the globe has improved on reports that China has delivered a written response to U.S. trade demands. U.S. government sources told Reuters Wednesday that China had sent a response to U.S. demands on the ongoing trade negotiation, giving hopes to investors that the two sides might bring an end to the spat. Walmart's mixed third-quarter results were enough to send shares up 1 percent before the market open. The company reported strong e-commerce sales as it continues to tack on brands to compete with rival Amazon and foster its grocery segment. The giant retailer also raise its forecast for earnings and same-store sales in the U.S. for the full year, expecting a strong holiday season. Concerns over an oversupply in oil markets continues to dominate the market. On Thursday, oil prices slipped amid fears of rising supply and slow consumption. Front-month Brent crude oil futures were trading at $66.42 per barrel on Thursday morning, down 30 cents, or 0.4 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $56.29 a barrel. Sterling plunged by over 1 percent against the dollar Thursday morning after U.K. Brexit Secretary Dominic Raab resigned from his post. This piles yet more pressure on U.K. Prime Minister Theresa May as she tries to get her draft Brexit agreement through Parliament. Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 216,000 for the week ended Nov. 10, the Labor Department said on Thursday. Retail sales rose 0.8 percent, higher than the 0.5 percent expected. Federal Reserve Chairman Jerome Powell touted the strength of the U.S. economy Wednesday evening, saying that markets should adjust to the idea that the central bank could hike interest rates at any time starting next year. Though Powell acknowledged that while the global economy is not as robust as it was last year, he added that domestic economic growth still looks strong. "I'm very happy about the state of the economy now," he said in an interview with Dallas Fed President Robert Kaplan. "Our policy is part of the reason why our economy is in such a good place right now." Stocks in Asia were mostly higher on Thursday on the back of an apparent improvement in market risk sentiment after British Prime Minister Theresa May managed to persuade her cabinet to back her draft Brexit agreement. European Union leaders will meet on Nov. 25 to endorse the divorce deal. In Hong Kong, the Hang Seng index rose 1.75 percent to close at 26,103.34. The mainland China markets, which have been closely watched as a result of Beijing's ongoing trade spat with Washington, saw gains. The Shanghai composite advanced 1.36 percent to close at about 2,668.17 and the Shenzhen composite gained 1.454 percent to finish the trading day at around 1,398.40. In Japan, however, shares appeared to buck the overall positive trend of the day. The Nikkei 225 slipped 0.2 percent to close at 21,803.62 while the Topix index saw losses of 0.14 percent to finish the trading day at 1,638.97, as shares of conglomerate SoftBank fell 2.7 percent. Meanwhile, South Korea's Kospi gained 0.97 percent to close at 2,088.06. Gold held steady on Thursday as the dollar regained momentum after Britain's Brexit agreement was thrown into turmoil, offsetting limited interest in the metal from investors seeking cover from the political fallout. Spot gold was unchanged at $1,211.21 per ounce at 1057 GMT. Prices rose 1 percent in the previous session. U.S. gold futures were up 0.1 percent at $1,211.60 per ounce.