U.S. Market Futures Pointing Lower with Uncertainty in Corporate Earnings

U.S. stock futures are pointing lower in pre-market trading for Wednesday, May 18. The Dow Futures are down at 17,473.0 for a loss of -16.00 points. The S&P 500 Futures are down -1.50 points to 2,042.0. The Nasdaq Futures are lower at 4,315.5, down 4.00 points. The Russell Futures are showing a loss of -2.30 points or 1,092.8.

In overnight trading in the Eastern Hemisphere, indexes traded lower. In Asia, the Shanghai Composite is at 2807.51 for a loss of -36.17 points or -1.27 percent. The Nikkei in Japan is at 16,644.69 for a loss of -8.11 points or -0.05 percent. Hong Kong’s Hang Seng Index is down -292.39 points or -1.45 percent at 19,826.41. The S&P BSE Sensex Index is down -69.00 points or -0.27 percent to 25,704.61 and India’s NSE Nifty is down -20.60 points or -0.26 percent to 7,870.15. The Asia Dow is also down at 2,594.11 for a loss of -16.41 points or -0.63 percent.

In Europe, stocks are also trading lower. The FTSE 100 is down -29.76 points or -0.48 percent to 6,138.01. The FTSE 250 is down -100.52 points or -0.60 percent to 16,744.56. France’s CAC 40 is down -14.07 points or -0.33 percent to 4,283.50. Germany’s DAX is down -29.60 points or -0.30 percent to 9,860.59. The Europe Dow is also lower at 1,520.58 for a loss of -11.73 points or -0.77 percent.

Wednesday’s Factors and Events

On Wednesday, Staples reported earnings before the opening bell. Earnings beat analysts’ expectations for revenue and earnings per share however sales were lower for the quarter. Revenue of $5.10 billion, beat expectations by $10 million, however revenue was down -3.0 percent from the comparable quarter. Earnings per share for the quarter were reported at $0.17, beating analysts’ expectations by $0.01.

On Wednesday, the market will receive the Federal Open Market Committee’s meeting minutes from the April meeting which should provide further insight into the economic direction for the economy. Also reported on Wednesday will be the Mortgage Bankers Association’s mortgage applications report and the EIA Petroleum Status Report. Mortgage applications are likely to continue trending lower as rates are increasing. In the energy sector, oil prices have been gaining slightly helping energy stocks and any signs of further improvement would greatly help market trading Wednesday.

Tuesday’s Activity

On Tuesday, market uncertainty over a June rate increase from the Federal Reserve and continued volatility in retail stocks continued to weigh on markets. On Tuesday, the Dow Jones Industrial Average lost -180.73 points or -1.02 percent to close at 17,529.98. The S&P 500 Index was also down at 2,047.21 for a loss of -19.45 points or -0.94 percent. The Nasdaq Composite Index closed at 4,715.73 for a loss of -59.73 points or -1.25 percent.

In the Dow Jones Industrial Average, Home Depot reported positive earnings with a 9 percent increase in revenue however the stock fell for the day as retail stocks continued to trade broadly lower. In the broad market, energy sector stocks were mostly higher while utilities and consumer staples led losses.

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Source: Home Depot Tuesday. Google Finance.

The Consumer Price Index, industrial production and housing starts were all key reports released on Tuesday. The CPI showed inflation increasing while industrial production and housing starts were robust.

Other notable index closes for Tuesday included the small-cap Russell 2000, closing lower at 1,097.75 for a loss of -18.46 points or -1.65 percent; the S&P 600 closing at 672.66 for a loss of -11.49 points or -1.68 percent; the S&P 400 Mid-Cap Index closing at 1,438.81 for a loss of -15.97 points or -1.10 percent; the Russell 3000 closing at 1,203.74 for a loss of -11.82 points or -0.97 percent; and the Dow Jones U.S. Select Dividend Index which closed at 581.16 for a loss of -7.28 points or -1.24 percent.

Julie Young

julie@dowfutures.org

Julie Young is a Senior Market Reporter and Analyst

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