Earnings Season Begins, Markets Retreat From Highs, Consumer Inflation Rises

Global markets are mixed in Tuesday trading, earnings season kicks off with results from JP Morgan, the Phase One Trade Deal is expected to be signed on Wednesday.
Thomas Hughes
Wall St. Bull

The U.S. Market Is Flat In Early Trading

The U.S. futures market is indicating a flat to a slightly lower open in early Tuesday trading. The move comes as earnings season kicks off and on the eve of the Phase One deal signing. JP Morgan tops the headlines after reporting record revenue that beat analysts consensus estimates. Although business slowed from the prior quarter is up from last year with notable strength across the consumer segment of the business. Also notable was an uptick in bond-trading revenue.

Results from Citigroup are comparable to JP Morgan and point to strength in the U.S. consumer. Citigroup beat on the top and bottom lines and share moved up nearly 0.70%.  Wells Fargo was not so fortunate. The tarnished banking giant missed revenue and EPS estimates as litigation costs pile up. The company’s new CEO says there are opportunities to cut costs and improve operations but shares fell anyway. Wells Fargo is down about -3.5% in early market action.

On the economic front, the U.S. Consumer Price Index rose by 0.2% over the last month. This is down a tenth from the previous month but up 2.3% from last year. At 2.3% it is running above the FOMC’s 2.0%, the PPI is due out tomorrow. Later in the week Retail Sales, the Beige Book, and Building Permits will be closely watched.

EU Trades Flat At Midday

The EU markets are trading flat to slightly lower at midday on Tuesday. The CAC is leading losses with a decline of -0.14% while the DAX and FTSE hover near 0.0%. Traders are closely watching events in Washington, the signing of a Phase One deal will have far-reaching impacts. Lie He is in Washington now, he is expected to sign the deal tomorrow.

Telecom stocks are in the lead with an average gain of 0.6%. The energy sector is lagging with losses near -0.4%. Tullow Oil continues to show volatility, leading the energy sector with a loss near -5.0%. NMC Health tops the charts with a gain of 5.6%. The embattled health care company is prepping for its legal battle against short-seller Muddy Waters.

Asia Mixed With Trade Deal In Sight

The Asian markets closed mixed on Tuesday as traders await the long-anticipated Phase One Trade Deal Signing. The details of the deal are still cloudy so there is still risk in the signing, the deal may not meet investor expectations. The Australian ASX led the market with a gain of 0.85%, the Nikkie and Kospi were not far behind. The Chinese Shanghai and Hong Kong Hang Seng both fell about -0.25%.

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