Tuesday April 30th

30-04-2019

Dow set to rise at the open on strong earnings from McDonald’s

U.S. stock index futures are set to rise at the open on Tuesday as market participants digest another busy day of corporate earnings and data releases. Dow futures rose 84 points, indicating a positive open of about 97 points. Futures on the S&P 500 and Nasdaq both indicated a lower open. Dow-component McDonald’s posted quarterly earnings and revenue that topped analysts’ expectations. Global same-store sales grew 5.4% in the first quarter, more than the 3.4% increase analysts expected, as the burger chain ramped up its promotion programs. Shares of McDonald’s rose more than 3% in premarket trading. General Electric reported better-than-expected first-quarter earnings Tuesday, sending its shares up as much as 10% in permarket trading. The company posted earnings of 13 cents a shares, above Wall Street consensus of 9 cents a share, according to Refinitiv. Revenue also came above expectations. But Alphabet’s earnings disappointed, pushing the stock down more than 7% in premarket trading. Google’s parent reported a revenue of $36.34 billion in the first quarter, versus $37.33 billion expected. The weaker revenue was driven by the decelerating ad sales growth at Google, the company said.  “Earnings sentiment has improved in April, with a slight bias towards upward revisions,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a note on Monday. “The macro backdrop/underlying demand were simply not nearly as bad as feared in 1Q19... We think Corporate America did everything within its powers in 1Q19 to support earnings growth and defend margins.” Merck and Pfizer both released earnings beats on Tuesday. Investors will also zoom in on Apple, which is set to report numbers after the bell. The S&P 500 slipped from an all-time high reached Monday on the back of solid results. Strong corporate earnings also pushed the market higher last week. On the data front, pending home sales and consumer confidence numbers are due at 10:00 a.m. ET. The Federal Reserve is also starting its two-day policy meeting Tuesday. Money managers will be looking for clues on the central bank’s plan for its balance sheet moving forward as well as its view on the economy. Shares in Asia-Pacific were mixed on Tuesday after China data showed that manufacturing activity grew less than expected. Meanwhile, trade negotiations between the U.S. and China were set to resume in Beijing. Greater China markets were higher on the day. The Shanghai compositeadvanced more than 0.5% to around 3,078.34 and the Shenzhen component added 0.54% to 9,674.53. The Shenzhen composite also rose 0.675% to about 1,636.59. In Hong Kong, the Hang Seng index declined around 0.6%, as of its final hour of trading. The Kospi in South Korea slipped 0.58% to close at 2,203.59. Oil prices on Tuesday as Venezuela’s opposition leader called on the military to back him to end Nicolas Maduro’s rule and after Saudi Arabia said a deal between producers to withhold output could be extended beyond June to cover all of 2019. The situation in Venezuela, an OPEC member whose oil exports have been hit by U.S. sanctions and an economic crisis, was fluid on Tuesday. The government promptly dismissed any suggestion of a military insurrection. The statements by Saudi energy minister Khalid Al-Falih came despite pressure by U.S. President Donald Trump to raise output to make up for a supply shortfall expected from tightening U.S. sanctions against Iran. “There was an uptick even without Venezuela due to Falih’s comments,” said analyst Olivier Jakob at Petromatrix. Brent crude futures were up $1.10, or 1.5%, $73.14 per barrel around 8:30 a.m. ET (1230 GMT). U.S. West Texas Intermediate crude futures rose $1.04, or 1.6%, $64.54 per barrel. Gold prices edged up on Tuesday as disappointing Chinese factory activity data brought back concerns about the health of the global economy, denting risk appetite. Spot gold rose 0.4 percent to $1,285 per ounce. U.S. gold futures were up 0.4 percent at $1,286.20 an ounce.