Futures Flat After McDonald’s Miss, Brexit Votes Expected Today, Trade Hopes Fuel Optimism

Global markets tread water as earnings season ramps up to full gear. Trade hopes help support stocks but earnings have so far been underwhelming.
Thomas Hughes
Wall St.

The U.S. Futures Are Flat, McDonald’s Misses Estimates

The U.S. futures are trading flat in the early Tuesday session. Trade hopes are fueling optimism but weaker than expected earnings from McDonald’s are capping gains. The Dow Jones Industrial Average is down slightly while the S&P 500 and NASDAQ Composite are just above break-even. McDonald’s reported revenue and eps below consensus on weaker than expected comps in the U.S. Comps in the U.S. rose nearly 5% but missed estimates by nearly 100 bps. Shares of MCD are down more than 3.0% in early trading.

Lockheed Martin and the Travelers Companies also reported before the bell. Lockheed Martin beat consensus top and bottom line and updated guidance to the high end of the previous range. Shares of that stock are down -2.33%. The Travelers Companies reported a top and bottom-line miss citing “challenging conditions” and sent its shares down more than -4.0%.

European Markets Are Slightly Higher At Midday

European indices are flat to slightly higher in early Tuesday trading as trade hopes and Brexit dominate the headlines. In trade news, Presidents Trump and Xi are expected to sign a limited trade deal in mid-November. Comments from Economic Advisor Larry Kudlow suggest the talks are advancing. According to him, there is a possibility the December tariffs will be canceled.

In Brexit news, MPs are expected to vote on a number of items over the next two days. On the list is approval for Boris Johnson’s deal to progress, changes to customs legislation, and a possible 2nd referendum. The FTSE is in the lead with a gain of 0.45% while the DAX and CAC trail with advances closer to 0.10%.

In stock news, shares of Just Eat are up nearly 25% after the company received a competing bid for acquisition. Shares of UBS are moving higher after it reported a 16% decline in YOY earnings. The bank cites “challenging conditions” but was able to beat consensus. Pharma giant Novartis is trading flat after beating consensus and raising guidance. Shares of Husqvarna are moving lower after it reported weak earnings.

Asia Moves Higher On Trade Hope

Asian markets closed higher at the end of Tuesday’s session. The Korean Kospi led with a gain of 1.16% on strength in tech and chips. The mainland China Shanghai Composite is runner up with a gain of 0.50% while the Hang Seng and Australian ASX trail with gains near 0.25%. The Japanese Nikkei is closed for a holiday.

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