Tuesday April 9th

9-04-2019

US futures slightly lower as investors monitor earnings, data

U.S. stock index futures indicated a slight decline ahead of the opening bell Tuesday as investors awaited the start of corporate earnings season later this week. At 7:48 a.m. ET, Dow futures were down 18 points, indicating a lower open of around 29 points. Futures for the Nasdaq and S&P 500 were also slightly lower. Market focus is centered on corporate earnings results, with major U.S. banks set to kick off the first-quarter earnings season later in the week. J.P. Morgan Chase and Wells Fargo are both poised to report their latest figures on Friday, while Citigroup and BlackRock are scheduled to publish their results next week. Bank of America, which will also report earnings next week, said Tuesday that it's raising its minimum wage for its employees to $20 an hour. The minimum wage at the company will be raised to $17 effective May 1 and will increase in increments over the next two years. Apple, one of the largest public companies in the world, is on track for its 10th straight day of gains. If the stock closes in positive territory Tuesday, it will be Apple's first 10-day win streak since 2010. Wall Street expectations for this earnings season imply a significant reduction to corporate profit growth in comparison to recent quarters. Investors anticipate first-quarter S&P 500 earnings growth to slip 4.3% on a year-over-year basis, according to FactSet estimates. If that forecast proves accurate, it would be the first profit contraction for the S&P 500 since the second quarter of 2016. S&P 500 revenues are expected to grow just under 5%. Trade tensions between the U.S. and the European Union intensified Tuesday following a World Trade Organization ruling over subsidies for Airbus. The WTO ruled last year that the subsidies caused "adverse effects to the U.S.," prompting Washington to consider $11 billion worth of retaliatory tariffs on a range of European goods. But Brussels on Tuesday responded to the prospective U.S. levies by saying it's ready to respond in kind. "The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated. The amount of WTO authorized retaliation can only be determined by the WTO-appointed arbitrator," a European Commission spokesman said. Disney shares rose in premarket trading Tuesday after brokerage Cowen upgraded the Dow component and told clients that its film pipeline should boost profits over the next few years. "We view Disney's catalyst path for the next year as highly attractive, and believe Thursday's investor day will likely be a deck-clearing event for sentiment," wrote Cowen analyst Doug Creutz. A gauge of confidence among U.S. small-business owners edged higher in March, according to the National Federation of Independent Business. The small-business lobby said its optimism index crept up to 101.8 in March, compared with 101.7 the previous month and 101.2 in January, representing two consecutive months of gains. The Labor Department will publish its JOLTS report on 10 a.m.; the update will offer investors a fresh glance at job openings throughout the U.S. economy. On the earnings front, Levi Strauss will be reporting its first results since its IPO (initial public offering). Stocks in Asia were mostly higher on Tuesday as investors watched developments such as the renewed conflict in key oil producing nation Libya. Mainland Chinese shares were mixed on the day, with the Shanghai composite slipping 0.16 percent to close at 3,239.66 and the Shenzhen component rising around 0.82 percent to 10,436.62. The Shenzhen composite advanced 0.724 percent to 1,783.01. Meanwhile, Hong Kong's Hang Seng index rose 0.17 percent in its final hour of trade, as shares of Chinese tech giant Tencent gained more than 0.5 percent. In Japan, the Nikkei 225 closed 0.19 percent higher at 21,802.59.The Topix index, however slipped fractionally to finish at 1,618.76. South Korea's Kospi gained 0.13 percent to close at 2,213.56. Oil prices hit fresh five-month highs on Tuesday, supported by concern that violence in Libya could further tighten supply, although Russian comments signaling willingness to pump more dampened the rally. Supply curbs led by OPEC have underpinned a more than 30 percent rally this year for Brent crude, despite downward pressure from fears of an economic slowdown. Brent, the global benchmark, rose to $71.34 a barrel, the highest since November. Around 7:30 a.m. ET (1130 GMT), it was down 7 cents at $71.03. U.S. crude also hit a high going back to November 2018 at $64.79 and was later up 3 cents at $64.43. Gold prices rose on Tuesday and were hovering close to their highest in more than a week touched in the previous session as the dollar eased on weak U.S. economic data, with the metal gaining further support from higher oil prices. Spot gold was up 0.3 percent at $1,300.47 per ounce, as of 0753 GMT. The metal touched an intra-day high of $1,303.61, highest since March 28, in the previous session. U.S. gold futures were up 0.1 percent at $1,303 an ounce.