Wednesday July 24th

24-07-2019

Dow futures point to 100-point drop after Boeing and Caterpillar earnings disappoint

U.S. stock index futures dropped on Wednesday after disappointing quarterly reports from Boeing and Caterpillar while trade worries remain. As of 8:06 a.m. ET, Dow Jones Industrial Average futures indicated a loss of 100 points at the open. S&P 500 and Nasdaq 100 futures were also lower. Boeing shares dropped more than 1% in the premarket before paring losses after the aerospace giant posted a massive loss for the previous quarter. The loss comes as costs pile up while its 737 Max jet remains grounded.  Caterpillar shares slid 3% after the company reported weaker-than-expected earnings and revenue amid rising costs. About a quarter of S&P 500 companies have reported second-quarter earnings so far. Of those companies, 78% have posted a better-than-expected profit, according to FactSet data. Wall Street also kept a close eye on tech stocks as companies in the sector face mounting regulatory pressure. Facebook, Amazon and Alphabet all traded lower in the premarket after the Justice Department announced a broad antitrust review of big tech companies. “We think that a broad movement to break up companies solely because they are large will fail without a change to existing antitrust laws,” said Dan Ives, an analyst at Wedbush Securities, in a note. “We believe that Congress and the DOJ will investigate claims of anticompetitive behavior, but ultimately, we expect a “no harm, no foul” outcome. We continue to be bullish on the likes of Apple, Google, Facebook, and Amazon and would be buyers of these names at current valuation.” Stocks closed higher in the previous session after CNBC reported American and Chinese negotiators will meet for face-to-face talks next week. Bloomberg News initially reported that in-person talks between China and the U.S. would start Monday as U.S. negotiators headed to China. The U.S. delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday, according to the report. In terms of data, there will be manufacturing and services PMIs at 09:45 a.m. ET and new home sales at 10:00 a.m. ET. Stocks in Asia Pacific were mostly higher on Wednesday following developments on the U.S.-China trade front. Mainland Chinese shares rose on the day, with the Shanghai composite adding 0.8% to 2,923.28 and the Shenzhen component gaining 0.99% to 9,266.30, while the Shenzhen composite advanced 1.106% to 1,562.97. Hong Kong’s Hang Seng index added 0.42%, as of its final hour of trading. The Nikkei 225 in Japan closed 0.41% higher at 21,709.57, while the Topix index added 0.4% to end its trading day in Tokyo at 1,575.09. Over in South Korea, however, the Kospi fell 0.91% to close at 2,082.30. Oil prices nudged higher on Wednesday, supported by a sharp fall in U.S. crude stocks and tensions over Iran. Brent crude futures were up 16 cents at $63.99 a barrel, while U.S. West Texas Intermediate crude was up 27 cents at $57.04 a barrel. U.S. crude stocks fell more than expected in the week to July 19, declining by 11 million barrels to 449 million, the trade group American Petroleum Institute said on Tuesday. That compared with analysts’ expectations for a decrease of 4 million barrels. Gold prices rose on Wednesday on expectations of monetary policy easing from major central banks to shore up the global economy though a stronger dollar curbed gains. Spot gold was up 0.7% at $1,426.62 per ounce, but was still short of last week’s peak at $1,452.60. U.S. gold futures for August delivery rose 0.4% to $1,427.00 per ounce.