Futures Flat In Early Trading, UK Soars On Merger Activity, Trade Talks In Focus

The U.S. Futures Are Flat In Early Monday Trading

The U.S. futures are flat in early Monday trading as traders prepare for a busy week. There are at least four major market-moving events this week, any of which could send the indices into a tailspin. Topping the list is the FOMC meeting on Wednesday. The committee is largely expected to cut rates by 25 bps but it will be the outlook for future cuts that investors will focus on. While the trade war has affected global economic activity the U.S. data is not pointing to a recession.

Also on tap this week is a raft of key economic data. Early in the week a read on Personal Income, Spending, and consumer prices will have an impact on the Fed decision. Later in the week traders will be paying attention to ISM data as well as key employment data. This week marks the end of July which means the monthly NFP report. Jobs growth is expected to have held steady in the last month after rebounding from low levels in June.

On the earnings front, this marks the busiest week of the 2Q earnings cycle. This week we can expect reports from 168 S&P 500 companies bringing the total number of reports up to 78%. Topping the list of expected reports is one from Apple. The world’s leading consumer technology company is slated to report after the bell on Tuesday.

UK Surges On Merger Activity

EU markets are mixed at midday on Monday as trade worry, earnings angst, and FOMC outlook weighs on activity. The UK FTSE 100 led the action with a gain of 1.5% as merger activity juiced investor sentiment. The stocks in question are Just Eat and Takeaway.com. The two food-delivery companies have agreed to tie-up for a potential merger. The new company would outsize Uber-Eats, the news sent shares of Just Eat up by 25%.

The DAX and the CAC were both hovering near break-even at midday as Brexit-chaos rages on. Over the weekend Scotland’s representative government said it would not support a no-deal Brexit. The announcement throws a wrench into plans of newly-elected Boris Johnson who was elected PM on his platform to Brexit with or without a deal.

In stock news, shares of Ryanair are moving higher despite a 21% decline in YOY EPS. The results were better than expected and helped send the stock up by 1.5%. Shares of Heineken, however, were not so buoyant after the beer company missed its expectations.

Asian Moves Lower, Trade Is In Focus

Asian equities were mostly lower on Monday as investors focus on the renewed trade talks. U.S. representatives are expected in Beijing this week for trade talks but no deal is expected to come. Regarding a deal, analysts are now saying it may be at least a year before a deal is announced.  Australia’s ASX was the only index to post a gain, about 0.50%, while the Korean Kospi posted the largest decline, -1.78%.