Futures Up As Earnings Season Starts, Global Markets Higher, China GDP Slowest In 27 Years

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

The U.S. futures are up in early Monday trading as investors gear up for peak earnings season. The Dow Jones Industrials are in the lead with a gain of 0.20%, followed closely by the S&P 500 and NASDAQ Composite. The market is expecting earnings for the S&P 500 to decline by -3.0% this quarter but so far the results are better than expected. Today’s news includes results from Citigroup. Citigroup reports EPS of $1.95 versus an expected $1.80. Results were hindered by increases to credit costs, up 16% YOY, but that weakness was offset by gains related to the TradeWeb IPO. Without TradeWeb Citigroup’s results are closer to $1.83. Later this week reports from JPM, MS, BAC, and GS.

Market action is also supported by FOMC hopes. The market is expecting the FOMC to cut rates by at least 25 basis points next week. The catch is that the NFP report does not support the idea of a rate cut and there is a lot of potentially market-moving data due out this week. The Beige Book, due out on Wednesday, may be the most important data but it is not the only data. We are expecting reads on Retail Sales, Housing Starts/Permits, Business Inventory, the Homebuilder Index, Jobless Claims, the Philly Fed MBOS, Leading Indicators, and Consumer Confidence.

EU Indices Up On Hopes, China

European markets are up in early Monday trading as Chinese data fuels hope for future economic activity. Chinese GDP came in at 6.2%, the slowest rate in 27 years, but in line with expectations. Within the report Industrial Production, Retail Sales, and Fixed Income Investment were all better than expected. The DAX is in the lead at midday with a gain of 0.43%, the FTSE is close behind at 0.32%, while the CAC is trailing with an advance of 0.10%.

Telecom is today’s biggest loser. The sector is down -0.80% following word the U.S. may grant licenses for domestic businesses to sell products to Huawei. Autos are in the lead with an average gain of 1.1%. Shares of Galapagos are at the top of the rankings. The biotech firm says Gilead is upping its stake by $5.1 billion.

In geopolitics, Iran’s Rhouhani has indicated his nation is ready to begin talks with the U.S. He says talks may begin if sanctions are lifted and the terms of the Nuclear Deal are reinstated first. The U.S.’ Pompeo said no to the offer claiming it would lead the U.S. down the same path the Obama administration took once before. According to him, Iran must first come to the table for serious talks before any changes to its status will be made.

China GDP Slowest In 27 Years

Chinese GDP hit the lowest level in 27 years but that factoid was shrugged off. At 6.2% the data is in line with expectations and still a substantial number. The Shanghai Composite led with a gain of 0.4%. The Hang Seng was closed behind with a gain of 0.30%. The Nikkei advanced 0.20% but others in the region were not so buoyant. The Kospi fell -0.20% while the Australian ASX shed -0.65%.