Monday April 29th

29-04-2019

Stock are flat as investors focus on earnings, US-China trade talks

U.S. stock index futures were little changed Monday morning, as market participants prepared for another day of corporate earnings and fresh data releases. At around 8:31 a.m. ET, Dow Jones Industrial Average futures indicated a nearly flat open. Futures on the S&P 500 and Nasdaq 100 also both barely budged. Corporate earnings remained a key focus for investors on Monday as Alphabetand Western Digital will update investors after the bell. Earlier on Monday, Restaurant Brands reported weaker-than-expected earnings after a surprise drop in Tim Hortons sales, sending its shares down 5.2% before the bell. Spotify Technology posted a bigger-than-forecast loss, but its stock went up 3.4% as the company also said it reached 100 million subscribers for its premium service. Strong corporate reports helped push the S&P 500 and Nasdaq Composite to record closing highs last week. The two indexes also notched solid weekly gains. “From a technical perspective, the SPX is back in record high territory after closing above its September ’18 high,” Craig Johnson, chief market technician at Piper Jaffray, said in a note. “However, for a record high week, volume was lackluster and only a relatively small percentage of constituents registered new highs.” “improving fundamentals and FOMO sentiment have pushed stocks back into record high territory,” Johnson said. “Overbought conditions have now developed and market breadth has not confirmed the recent breakout. We believe some consolidation is likely and advise investors to consider realizing some gains at this juncture.” On the data front, the core personal consumption expenditures index — the Federal Reserve’s preferred measure of inflation —  remained unchanged in March. Economists polled by Refinitiv expected a gain of 1.7%. Furthermore, investors are also tracking developments in trade talks between the U.S. and China. Treasury Secretary Steven Mnuchin said that both sides are “getting into the final laps” of their negotiations, The New York Times reported. Shares in the Asia Pacific region were mixed on Monday, while markets in Japan were closed for a holiday. Mainland Chinese shares fell by the close, with the Shanghai composite 0.77% lower at 3,062.50 and the Shenzhen component dropping about 2.88% to 9,622.49. The Shenzhen composite also declined 2.412% to 1,625.62. Meanwhile, Hong Kong’s Hang Seng index advanced 0.88% in its final hour of trading. In South Korea, the Kospi added 1.70%. Japan is currently on a 10-day holiday from April 27 to May 6 to celebrate the enthronement of the country’s Crown Prince Naruhito. Oil prices fell on Monday, extending a slump from Friday that ended weeks of rallying, after President Donald Trump claimed that he demanded OPEC raise output to soften the impact of U.S. sanctions against Iran. Brent crude futures were down 14 cents at $72.01 a barrel around 8:35 a.m. ET (1235 GMT). U.S. West Texas Intermediate crude futures lost 14 cents to $63.16. Both benchmarks fell around 3% in the previous session, after Trump said he told OPEC to lower oil prices. Gold prices eased on Monday, having touched a more-than one week high in the previous session, as stronger equity markets lifted risk-sentiment, thereby eroding safe-haven demand of the metal. Spot gold fell by 0.3 percent to $1,281.87 per ounce at 0847 GMT, having hit its highest since April 16 at $1,288.59 in the previous session. U.S. gold futures shed 0.4 percent to $1,283.80 an ounce.