U.S. Futures Down as Earnings Flow
U.S. stocks should edge lower at the open on Tuesday. Investors were turning cautious as the earnings season kicks into high gear ahead of a Federal Reserve meeting. Uncertainty still exists over the new fiscal stimulus.
At 7:30 AM ET (1130 GMT), S&P 500 Futures traded 15 points, or 0.4%, lower. Nasdaq Futures declined by 64 points, or 0.6%, while the Dow Futures contract fell by 144 points, or 0.5%.
Senate Republicans on Monday proposed a $1 trillion coronavirus aid package after securing an agreement with the White House. This is paving the way for urgent negotiations with the opposition, the Democrats.
Expanded unemployment benefits for millions expire at the end of this week.
Meanwhile, in the stock market, the earnings season heats up. This week is set to see around a third of S&P 500 companies reporting.
Pfizer and Raytheon Technologies have impressed with their quarterly results. McDonald’s and 3M have disappointed investors, however.
The likes of Visa, Advanced Micro Devices, Amgen, eBay, Mondelez International, and Starbucks are due to report after the bell.
U.S. Futures: The Federal Reserve
Stock trading reports the central bank’s Federal Open Market Committee begins the latest of its regular two-day meetings on Tuesday. The expectations are for the central bank to maintain rates near zero.
But there is speculation that the Fed may go with a further relaxation of policies before too long.
The central bank’s policymakers have become more downbeat on the economic outlook in recent weeks. That is with caution that recent improvements in economic data, such as job employment data, gains may be fleeting. This is amid a resurgence in the coronavirus pandemic.
There have been signs of improvement in the U.S.’s battle with the Covid-19 virus. New infections fell to their lowest level in nearly three weeks at the weekend. This suggests a slowdown beyond the normal weekend dip.
Economic numbers came in the form of house price data from S&P/Case Shiller at 7 AM ET. They also came from the Conference Board’s consumer sentiment index at 8 AM, and Richmond Fed’s regional business survey at 8 AM.
Oil prices for the most part did not change on Tuesday. The U.S. crude futures traded 0.3% lower at $41.46 a barrel. The international benchmark Brent contract rose by 0.1% to $42.92.
Traders will watch out for U.S. inventory data. It is due from the American Petroleum Institute industry group later on Tuesday. They will also await the government on Wednesday.
