Wednesday August 8th

8-08-2018

US stock futures pause for breath as S&P 500 flirts with record high

U.S. stock index futures rose marginally prior to the start of Wednesday's session as the S&P 500 was within striking distance of hitting an all-time high. At around 8 a.m. ET, Dow Jones Industrial Average rose 8 points, indicating a gain of 16.09 points. S&P 500 futures pointed to a gain of 0.1 percent and Nasdaq 100 futures indicated a relatively flat start to the day. The S&P 500 closed Tuesday's session just half a percent from a record high. If the index breaks above 2,872.87, it would notch its first all-time high since Jan. 26. The Nasdaq Composite was also less than 1 percent away from a record while the Dow remained 3.7 percent below its all-time high through Tuesday's close. Stocks have been able to climb toward record levels as a strong batch of corporate earnings has offset worries around global trade. Nearly 90 percent of S&P 500 companies have released their calendar second-quarter. Of those companies, 76.36 percent have reported better-than-forecast quarterly profits, according to FactSet. If the earnings season ends with at least 80 percent of companies beating estimates, it would mark the first time that has happened since FactSet started tracking the data in 2008. Amazon and Apple are among the companies that have reported better-than-expected earnings. CVS Health also posted better-than-expected earnings on Wednesday, sending its shares up by 3.3 percent. But trade concerns have lingered throughout the earnings season. Most recently, the U.S. Trade Representative's office announced Tuesday that the States would begin gathering levies on an additional $16 billion in Chinese goods later this month. It also published a final tariff list that pointed out 279 import product lines, according to Reuters. The initial set of tariffs, which was on $34 billion worth of goods, came into effect last month. In recent days, Chinese state media has hit back at the U.S. in light of the levies that have been threatened. Tesla CEO Elon Musk meantime published a series of tweets Tuesday about potentially taking the automaker private at $420 a share. However in a blog post, he added that the final decision had not yet been made. Shares rose over 10 percent by Tuesday's close. Asian stocks closed mixed on Wednesday, with China losing steam after rebounding in the last session, as regional markets took cues from Wall Street's overnight advance on strong earnings. Japan's Nikkei 225 closed lower by 0.08 percent, or 18.43 points, at 22,644.31, after dropping more than 100 points within the span of minutes during afternoon trade.  South Korean stocks also traded higher, with the Kospi inching higher by 0.06 percent to 2,301.45. Elsewhere, Hong Kong's Hang Seng Index edged higher by 0.15 percent by 3:00 p.m. Mainland Chinese shares pulled back, with losses steepening in afternoon trade, after bouncing in the last session. The Shanghai Composite fell 1.23 percent to close at 2,745.11 and the blue-chip CSI 300 lost 1.59 percent by the end of the day. Data released in the morning showed China's trade surplus with the U.S. slipped to $28.1 billion in July, Reuters said, as the two countries remained engaged in a trade dispute. That compared to the $28.9 billion seen in June. Oil prices fell on Wednesday after China reported relatively weak import data and the latest escalation in a trade dispute between Washington and Beijing. Front-month Brent crude oil futures were down 56 cents at $74.09 per barrel by 8:36 a.m. ET (1236 GMT). U.S. West Texas Intermediate (WTI) crude futures fell 85 cents, or 1.2 percent, to $68.32 per barrel. Gold prices steadied on Wednesday, but expectations of a higher dollar due to rising U.S. interest rates and strong demand for U.S. Treasury bonds seen as a refuge from trade tensions are expected to weigh. Spot gold was flat at $1,210.46 an ounce compared with $1,204 hit last week, its lowest since March 2017. Prices are down more than 10 percent since April. U.S. gold futures were up 0.03 percent at $1,218.70.