Futures Fall, Earnings Fail To Impress, Trade Concerns LingerGlobal markets pull back after the S&P 500 set a new all-time high. Earnings and trade remain in focus. And the FOMC. And the data. It’s going to be a busy week.
The U.S. Market Is Indicated Lower In Early Tuesday Trading
The U.S. market is looking at a slightly lower open on Tuesday. The major indices are all in retreat after the S&P 500 set a new all-time high on Monday. The Dow Jones Industrial Average is in the lead with a loss of -0.20% while the S&P 500 and NASDAQ Composite are down close to -0.10%. Earnings reports from Google and Mastercard are affecting early trading, one positively and one negatively.
Google reported revenue above expectations but rising costs and spending took a big bite out of the bottom line. EPS fell far short of consensus and drove share prices down by -1.6%. Mastercard reported better than expected top and bottom-line results. Results were aided by acquisitions and cross-border transaction volume, shares rose about 0.85% on the news. Merck and Pfizer also reported before the open. Both pharma giants delivered better than expected top and bottom-line numbers and saw their shares move up 3.0%.
In economic news, the FOMC meeting begins today. The committee is expected to deliver a rate cut with tomorrow’s policy statement but the outlook for future cuts remains cloudy. Key economic data like 3rd quarter GDP, personal income and spending, consumer prices, and October labor data are all due out concurrent to or following the Fed’s decision.
EU Markets Are Flat To Down
The EU markets are flat and down at midday. The FTSE is leading with a loss of -0.60% while the DAX and CAC are trading closer to break-even levels. The move in the UK is due in part to political wrangling in Parliament. Boris Johnson has failed three times to force a general election before the new Brexit date but he is expected to try again.
In stock news shares of BP are down about -0.50%. The integrated oil company reports EPS is down -41% from last year and outlook for future growth is dim. Shares of Swedbank are also moving lower in early trading. The bank’s shares are down -2.0% following an announced misdemeanor-level investigation into a subsidiary.
Asian Markets Are Mixed; Trade Hope VS Trade Fear
Asian markets are firmly mixed after Tuesday’s session. The Shanghai Composite and Hong Kong Hang Seng index are the only markets to show losses and those are -0.87% and -0.39% respectively. The Japanese Nikkie is in the lead with an advance of 0.47%. The moves are driven by trade-related news that seems to point to a growing consensus between China and the U.S. Despite the hope, traders are cautious because there is still no deal on the table and, if one comes, it isn’t going to alter the status quo.