Tuesday March 5th

5-03-2019

Stock futures point to flat open as investors monitor US-China trade talks, Target rises on earnings

U.S. stock index futures indicated a flat open Tuesday as investors weighed ongoing trade negotiations with China along with strong earnings from Target. At around 7:10 a.m. ET, Dow Jones Industrial Average futures were up 26 points, indicating a gain of just 23 points. Futures on the S&P 500 and Nasdaq 100 both pointed to a flat start to the day. Wall Street ended Monday on a negative note, after some disappointing data affected market sentiment. Construction spending fell 0.6 percent in December. More broadly, market players are focused on U.S.-China trade developments with mixed messages on the progress of talks between Washington and Beijing over the last days. Sources told CNBC on Monday that U.S.-China trade negotiations are in the "final stages" and that a summit in Mar-a-Lago later this month could close the deal. Secretary of State Mike Pompeo also said Monday he thought the two countries were "on the cusp" of reaching a deal that would end the trade skirmish. "We're trying to get that rectified, get that fixed, make it fair and reciprocal and I think we're on the cusp of doing that and I hope all those tariffs will go away, all those barriers," Pompeo told KCCI television in Des Moines, where he was attending a farmers conference. Investors also cheered stronger-than-expected quarterly results out of retailer Target, sending its shares up around 6 percent. The company posted earnings per share of $1.53 and revenue of $22.977 billion. Both numbers topped analyst estimates from Refinitiv. Target's same-store sales, a key metric watched by Wall Street, rose 5.1 percent. The company also said its digital sales grew by more than 25 percent. On the economic front, there will be services PMIs at 9.45 a.m. ET; new home sales at 10 a.m. ET and federal budget figures released at 2 p.m. ET. Markets in Asia were mixed by the end of Tuesday, with China announcing at its annual parliamentary meeting that it has cut its growth target. Shares in mainland China were higher, with the Shenzhen component rising 2.252 percent to 9,595.74 and the Shanghai composite advancing 0.88 percent to 3,054.25. The Shenzhen composite advanced 2.282 percent to 1,635.98. Hong Kong's Hang Seng index was around 0.1 percent higher, as of its final hour of trading. Elsewhere in Asia, other major stock markets closed lower: Japan's Nikkei 225 slipped 0.44 percent to 21,726.28, while the Topix shed 0.51 percent to 1,619.23. The Kospi in South Korea fell 0.52 percent to 2,179.23. Oil prices edged higher on Tuesday as OPEC-led efforts to tighten supply offset the restart of Libya's biggest oilfield and the prospect of weaker demand. Supply curbs by OPEC and its allies have helped to drive oil prices more than 20 percent higher this year. Russia plans to speed up its output cuts this month, the energy minister said on Monday. Brent crude, the international benchmark, rose 17 cents to $65.84 a barrel around 8:02 a.m. ET (1302 GMT), rallying from a session low of $65.04. U.S. West Texas Intermediate crude were up 17 cents at $56.76, after dropping as low as $56.09. Gold prices held close to a more than five-week low on Tuesday as the dollar firmed and global equity markets held near a five-month crest, making bullion less appealing for investors. Spot gold fell 0.07 percent to $1,285.51 an ounce by 7:58 a.m. ET, close to its lowest since Jan. 25 at $1,282.50, hit in the previous session. U.S. gold futures fell 0.05 percent to $1,286.90.