Earnings Season Underway, EU Moves Lower On Trade Concerns, Uncertainty Dominant Theme On Wall Street

Global indices retreat as trade woe resurfaces and corporate earnings roll in.
Thomas Hughes

Futures Flat As Earnings Season Gets Underway

The U.S. futures are flat in early Wednesday trading as the 2nd quarter earnings season ramps to full speed. So far the average S&P 500 company has beaten its consensus EPS estimate but by a smaller margin than expected. Over the past five years, the average S&P 500 company beat consensus by 4.5%, this quarter that rate is closer to 3.0%. The tech-heavy NASDAQ Composite is in the lead with a gain of 0.11% followed by a 0.05% advance in the Dow Industrials and S&P 500. The Dow Jones Transportation Average continues to lag the market in what looks like a classic Dow Theory indication of an imminent reversal.

In earnings news, Bank of America reported this morning and beat on the top and bottom lines. The company says strength in retail banking offset weakness in trading and other non-core businesses. Shares shot higher after the release but quickly reversed course to shed nearly -0.25%. Shipping giant CSX reported a miss driven by trade-related woe. The company also lowered full-year guidance as it expects revenue to fall -1% to -2%. Cintas, a provider of labor-force services, beat on the top and bottom line and drove its shares up by 5.0% in premarket trading.

In trade news, Trump’s off-the-cuff Tweets during the Tuesday session has put the market on edge. Trump says the U.S. may increase tariffs on $325 billion worth of Chinese goods despite the truce put in place by himself and Xi.

EU Stocks Move Lower On Trade Concerns

EU stocks are broadly lower in Wednesday trading as trade concerns rear their head again. Trump’s late-day Tweet’s on Tuesday have raised concerns on the timing of a U.S./China trade deal. Trump says the two nations have a long way to go and that the U.S. could raise tariffs if it “wanted to”.  The UK FTSE 100 led the decline with a loss of -0.25% while the DAX and CAC both shed about -0.15%. Oil and gas stocks led the rout with a loss of -1.3%, food and beverage stocks led advancing issues with a gain of 0.70%.

In economic news, EU CPI came in hotter than expected. The headline CPI read came in a tenth hotter than expected for the MoM and YoY comparison. The data did little to alter ECB outlook though because core CPI was on the weak side of consensus.

Asia Lower, Trade Woe Weighs On Sentiment

Asian indices were mostly lower following Tuesday’s session on Wall Street. The Korean Kospi fell more than -0.90% as trade relations with Japan remain tense. The Nikkei, Shanghai Composite, and Hang Seng all fell -0.10% to -0.30%. The Australian ASX was the only index to advance in Wednesday trading.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.