Wednesday January 17th

17-01-2018

Dow futures surge 127 points on better-than-expected earnings; Bank of America rises

U.S. stock index futures posted sharp gains before Wednesday's open on the back of strong quarterly results from some of the biggest banks in the world. Dow Jones industrial average futures rose 127 points, while S&P 500 and Nasdaq 100 futures gained 9.25 points and 22.75 points, respectively. On Tuesday, U.S. equities finished the trading day lower, pulling back from the highs seen during the session. During Tuesday trade, the Dow Jones industrial average rose as much as 283 points, breaking the 26,000 mark for the first time. Concerns over a possible government shutdown, however, weighed on market sentiment, causing major markets to end in the red. By the end of Friday, Congress has to pass a spending bill in order to prevent a government shutdown; however, Democrats and Republicans remain at odds over an immigration bill that the Democratic Party wants to pass. Looking to today's trade, earnings and economic data is expected to sway sentiment. Bank of America reported better-than-expected earnings, sending shares slightly higher. Alcoa is scheduled to report after the close on Wednesday. On the data front, the business leaders' survey is set for release at 8:30 a.m. ET and industrial production data at 9:15 a.m. ET. At 10 a.m. ET, the NAHB/Wells Fargo Housing Market Index is set to be released, while the Fed's Beige Book is due at 2 p.m. ET and the Treasury International Capital (TIC) data at 4 p.m. ET. When it comes to the economy, investors will be awaiting the latest remarks from Chicago Fed President Charles Evans and Dallas Fed President Robert Kaplan, who are both expected to be present at the American Council of Life Insurers executive roundtable in Palm Beach, Florida. Elsewhere, cryptocurrencies will be of key importance after many major digital currencies posted sharp declines Tuesday. Bitcoin briefly tumbled below $10,000 following comments from South Korean authorities that pointed to stricter regulation on cryptocurrency trading. Asian markets closed in negative territory on Wednesday after Wall Street reversed a triple-digit point gain to close lower in the previous session. Japan's Nikkei 225 declined 0.35 percent, or 83.47 points, to close at 23,868.34 after touching a 26-year high in the previous session. Over in South Korea, the Kospi slipped 0.25 percent to end at 2,515.43. Hong Kong's Hang Seng Index pulled back 0.13 percent by 3:00 p.m. HK/SIN after notching a record close on Tuesday. On the mainland, the Shanghai composite bucked the overall downward trend to eke out slight gains, closing 0.26 percent higher at 3,445.36. The Shenzhen composite, however, slid 0.3 percent to end at 1,921.74. Oil prices weakened following early gains on Wednesday, but remained underpinned by tightening supply and strong global demand. Tighter fundamentals have lifted both crude futures benchmarks about 13 percent above levels in early December, helped by production curbs by OPEC and Russia, as well as by healthy demand growth. Brent crude futures were at $69.94 a barrel at 0946 GMT, down 21 cents from the last close, after hitting $69.37. Brent on Monday rose to $70.37 a barrel, its highest since December 2014. U.S. West Texas Intermediate (WTI) crude futures were at $63.60 a barrel, down 13 cents on the day and down from $63.89 earlier. WTI hit $64.89 on Tuesday, also the highest since December 2014. Gold prices held near four-month highs on Wednesday even as a stronger dollar made bullion more expensive for holders of other currencies. "The euro is down a bit against the dollar today, which has led to gold coming off its highs," said Mitsubishi analyst Jonathan Butler. Spot gold was down 0.26 percent at $1,335.01 an ounce at 8:27 a.m. ET, close to Monday's peak of $1,344.44, its highest since Sept. 8. U.S. gold futures were down 0.13 percent at $1,335.40. Butler said that gold is likely to remain within a range of $1,300-$1,340 in the short term as the dollar remained weak.