Tuesday January 14th

14-01-2020

Stock futures are little changed. JP Morgan shares jump after reporting record annual profit

U.S. stock index futures were little changed on Tuesday as the corporate earnings season kicked off with J.P. Morgan Chase posting stronger-than-forecast quarterly results. Around 7:10 a.m. ET, Dow Jones Industrial Average futures pointed to a gain of just 8 points. Futures on the S&P 500 and Nasdaq 100 also indicated a flat open. J.P. Morgan Chase posted quarterly earnings and revenue that beat analyst expectations, sending the stock up more than 1.5% in the premarket. The bank’s annual profits also reached record levels at $36.4 billion. J.P. Morgan also had a surge in bond-trading revenues during the fourth quarter. Citigroup and Wells Fargo are due to report quarterly numbers later in the morning. Delta Air Lines also reported better-than-expected earnings, boosted by lower fuel costs and strong travel demand. The results sent Delta shares higher by nearly 4% before the bell. Despite the strong results from J.P. Morgan and Delta, expectations for the corporate earnings season were low. S&P 500 profits were forecast to fall 2% in the fourth quarter on a year-over-year basis, according to FactSet. “The market continues to be in an extreme overbought condition that indicates the recent gains could be temporarily given back, while the fundamental backdrop driven by our core thesis and EPS suggest buying any meaningful weakness,” Tony Dwyer, chief market strategist at Canaccord Genuity, said in a note. Wall Street came into Tuesday’s session after posting solid gains on Monday that led the S&P 500 and Nasdaq to record levels. Sentiment got a boost from optimism around U.S.-China trade relations. The U.S. said it will remove  China from a list of currency manipulating countries. The announcement came just a few days before the two largest world economies are due to sign a “phase one” trade deal in Washington, D.C. Ahead of the signing, the South China Morning Post reported that the trade war is “not over yet” and that Wednesday’s ceremony will be more like the “first round of a game.” On the data calendar, the National Federation of Independent Business will release its latest small business survey at 6 a.m. ET, followed by new U.S. inflation figures at 8:30 a.m. ET. Shares in Asia bounded higher on Tuesday as market sentiment improved ahead of the phase one trade deal signing between China and the U.S. later this week. Optimism rose further after Washington said Beijing was no longer a currency manipulator. The Nikkei 225 climbed 0.73% to close at 24,025.17 and the Topix index was up 0.31% to 1,740.53 after Japanese markets returned from a public holiday on Monday. In South Korea, the Kospi gained 0.43% to close at 2,238.88. Chinese markets were the outliers during Tuesday’s session. The Shanghai composite traded down 0.28% to close at 3,106.82, and the Shenzhen composite fell 0.23% to 1,818.13. The Shenzhen component lost 0.47% to close at 10,988.77. Hong Kong’s Hang Seng index declined 0.28% during the last hour of trade. Oil prices rose above $64.50 a barrel on Tuesday, snapping four straight days of declines on easing Mideast tensions as the United States and China, the world’s top energy consumers, prepared to sign a preliminary trade deal. Brent crude gained 51 cents, or 0.8%, to trade at $64.72 per barrel. U.S. West Texas Intermediate crude futures rose 38 cents or 0.7% to $58.46 a barrel. Gold slipped to an over one-week low on Tuesday as strength in equities markets and hopes for a smooth signing of the U.S.-China Phase 1 trade deal tarnished bullion’s safe-haven appeal, while palladium rose to a record high. Spot gold dipped 0.38% to $1,542.23 per ounce. Earlier, prices fell to their lowest since Jan. 3 at $1,535.63. U.S. gold futures dropped 0.5% to $1,542.9.