U.S. Futures Down as Crude Oil Falls
U.S. futures are set to weaken at the open Tuesday, with investors and traders on edge. Oil futures head lower and the disappointing earnings season remains distressed.
In stock trading, S&P 500 traded 38 points, or 1.4% lower and Nasdaq was down 71 points, or 0.8%. The Dow contract dropped 424 points, or 1.8%.
The price of oil has continued to fall Tuesday, with the front month May WTI contract, due to expire later Tuesday. Still weak, although not as low as Monday’s settlement of minus $37.63 a barrel.
The June contract is where most of the volume and open interest lies, and it is in positive territory. But it traded 18% lower at $16.71 a barrel, while the international benchmark Brent contract fell 15% to $21.66.
As a result, oil giant Exxon Mobil shed 3.7% in premarket trading and major rival Chevron slipped 4.0%. Other oil-related companies including Apache Corp, Halliburton, ConocoPhillips, Schlumberger, and Occidental Petroleum were hit even harder.
Futures Picking Up Elsewhere
Elsewhere, futures in the stock market are picking up as the pace of the earnings season improves. That is with almost one-fifth of the S&P 500 companies reporting this week.
Shares in IBM fell 4.7% premarket after the company reported late Monday its revenue declined 3.4% in the first quarter. The coronavirus pandemic has hit software sales heavily in March. Moreover, the company also pulled its annual guidance.
Shares in Hertz Global are seen 4.1% lower premarket. This came after the car rental giant disclosed Monday it will lay off 10,000 employees in North America. The lay off is due to a sharp downturn in its business during the coronavirus pandemic.
Coca-Cola reported on Tuesday that first-quarter earnings and revenue topped expectations. However, the soft drink giant withdrew its forecasts for 2020, reporting that global sales volumes have plunged 25% since April. Coca-Cola shares went up 1.4% premarket.
Small businesses could receive even more relief funding from the United States government in the near future. They expect Congress to vote later Tuesday on a new $450 billion package.
Meanwhile, the economic calendar is a little bare Tuesday, centering mainly around the March existing home sales release.
The American Petroleum Institute’s weekly inventories data for last week will likely be of great interest given Monday’s events.
In other news, gold futures dropped 1.5% to $1,686.70/oz, while EUR/USD traded at $1.0830, down 0.3%.
Once again, investors are crowding into a narrow range of technology and internet stocks. Increasing concerns that the market’s dramatic bounce from last month’s lows is becoming more vulnerable to sharp reversals. The coronavirus outbreak still continues to batter the economy.
