Wall Street Might Open Moderately Positive

wallstreet july14

Consumer price inflation in the month of June as well as earnings reports of major corporates might be influencing market sentiments on Tuesday. JPMorgan Chase has recorded a fall in profit due to higher credit loss provisions.

The latest news on a global spike in coronavirus infections, with more than 13 million cases already reported, might dampen the sentiments. WHO has described COVID-19 as the number one public enemy.

Earlier cues from the U.S. Futures Index suggest that Wall Street might open moderately up.

Asian shares finished in the red, while European shares are trading down.

As of 8.20 am ET, the Dow futures were adding 149.00 points, the S&P 500 futures were up 11.75 points and the Nasdaq 100 futures were gaining 49.25 points.

U.S. major indices finished broadly down. The Nasdaq plunged 226.60 points or 2.1 percent to 10,390.84. The S&P 500 also slumped 29.82 points or 0.9 percent to 3,155.22, while the Dow inched up 10.50 points or less than a tenth of a percent to 26,085.80.

On the economic front, the Consumer Price Index for June will be issued at 8.30 am ET. The consensus is for plus 0.5 percent, while it was down 0.1 percent in the prior month.
The Redbook data, a weekly measure of comparable store sales at chain stores, discounters, and department stores, will be published at 8.55 am ET. In the prior week, the store sales were declined 6.9 percent.

Federal Reserve Member of the Board of Governors Lael Brainard will speak at a National Association for Business Economics webinar at 2.00 pm ET.

St. Louis Federal Reserve Bank President James Bullard will speak in a live-streamed event at the Economic Club of New York on the U.S. economy and monetary policy at 2.30 pm ET.

In the corporate sector, US investment bank JPMorgan Chase & Co. (JPM) reported profit for the second quarter that plunged 51 percent from last year, driven by significantly higher provision for credit losses for reserve builds. Both earnings per share and revenues for the quarter topped analysts' expectations.

Net income for the second quarter declined 51 percent to $4.69 billion from last year's $9.65 billion, with earnings per share also dropped 51 percent to $1.38 from $2.82 in the prior year.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude special items.

The provision for credit losses soared to $10.47 billion from $1.15 billion in the prior year, driven by reserve builds which reflect further deterioration and increased uncertainty in the macroeconomic outlook because of the impact of COVID-19.

Total net revenue on a reported basis was $33.0 billion. On a managed basis, net revenue was $33.82 billion, up 15 percent from $29.48 billion in the previous year. Wall Street expected revenues of $30.29 billion for the quarter.

Asian stocks ended mostly lower on Tuesday. Chinese shares declined. The benchmark Shanghai Composite index ended down 28.67 points, or 0.83 percent, at 3,414.62.
Hong Kong's Hang Seng index fell 1.14 percent to 25,477.89.

Japanese shares lost ground on Tuesday. The benchmark Nikkei fell 197.73 points, or 0.87 percent, to 22,587.01, while the broader Topix index closed half a percent lower at 1,565.15.

Australian markets fell. The benchmark S&P/ASX 200 index dropped 36.40 points, or 0.61 percent to 5,941.10, while the broader All Ordinaries index ended down 43.80 points, or 0.72 percent, at 6,045.50.

Australia's business confidence and conditions rebounded in June. The business confidence index rose 21 points to 1 from -20 in May. Confidence increased across all sectors except retail in the month.

European shares are trading lower. Among the major indexes in the region, the CAC 40 Index of France is down 69.04 points or 1.37 percent. The German DAX is losing 147.30 points or 1.15 percent, the U.K. FTSE 100 Index is sliding 6.64 points or 0.12 percent.

The Swiss Market Index is down 65.26 points or 0.62 percent.

The Euro Stoxx 50 Index, which is a compilation of 50 blue chip stocks across the euro area, is down 1.24 percent.

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