Wednesday July 20th

20-07-2016

Stocks set to open higher after Morgan Stanley beats Street

U.S. stock index futures rose on Wednesday as investors cheered better-than-expected earnings from Morgan Stanley. Morgan Stanley topped analysts' estimates for the second quarter, reporting earnings per share of 75 cents and revenue of $8.9 billion. The day will be another busy one for U.S. second-quarter earnings, with results due from Abbott Labs, American Express, eBay, Intel, Qualcomm, Mattel and United Continental among others. According to Thomson Reuters, 64 percent of S&P 500 companies that had reported as of Tuesday morning topped earnings estimates. That compares to a long-term average of 63 percent over the past 22 years. No U.S. economic data is due on Wednesday bar the weekly MBA Mortgage Index and crude oil inventories. WTI crude futures for August crept higher early on Wednesday, having fallen overnight. European stocks gained early on Wednesday after a slew of earnings news there. However, shares of FTSE 250-listed Man Group tumbled more than 4 percent following the news that the hedge fund's chief executive will join Pacific Investment Management Co., Pimco, as its new CEO in November. Meanwhile, Monsanto termed Bayer's $64 billion bid inadequate, amid speculation the U.S. seed giant will hold out for a $130 per share offer. The U.S. dollar traded higher against a basket of currencies on Wednesday, topping 97, up from levels around 96 last week. The currency has gained this week after strong U.S. economic data, particularly relative to other major economies. The major U.S. stock indexes closed narrowly lower on Tuesday. Asia markets lost some momentum on Wednesday, closing mixed, while Nintendo shares took a tumble after reports said the launch of the highly popular "Pokemon Go" app in Japan had been postponed. Japan's benchmark Nikkei 225 closed down 41.42 points, or 0.25 percent, at 16,681.89, after  finishing the Tuesday session at a six-week high. In South Korea, the Kospi closed lower by 1.43 points, or 0.07 percent, to 2,015.46. Hong Kong's Hang Seng index advanced 0.91 percent by late-afternoon trade. Chinese mainland markets closed mixed, with the Shanghai composite dropping 8.26 points, or 0.27 percent, to 3,028.33, while the Shenzhen composite finished nearly flat at 2,035.84. Oil prices were lower on Wednesday ahead of weekly U.S. crude inventory data as investors awaited a clearer signal on whether a glut was easing in the world's largest oil-consuming nation. Brent crude was down 34 cents at $46.32 a barrel by 8:45 a.m. (1245 GMT). On Tuesday, the contract settled down 30 cents, or 0.6 percent, at $46.66 barrel. U.S. West Texas Intermediate (WTI) crude fell 53 cents at $44.12 a barrel. It settled down 59 cents, or 1.3 percent, at $44.65 in the previous session. The front-month August contract will expire at the end of Wednesday's session. Gold fell on Wednesday finding little impetus from easing equities as the dollar rose to a four-month high on the back of better-than-expected U.S. housing data. Spot gold fell 0.5 percent to $1,324.83 an ounce at 0702 GMT. It closed at $1,331.73 on Tuesday. U.S. gold was down 0.5 percent at $1,325.60 an ounce.