Friday October 25th

25-10-2019

Stocks are set for a muted open after Amazon earnings disappoint

U.S. stock index futures pointed to a little-changed open on Friday as investors digested disappointing quarterly results from Amazon. At around 6:50 a.m. ET, Dow Jones Industrial Average futures pointed to a gain of 31 points at the open. S&P 500 and Nasdaq 100 futures pointed to slight losses, however. Amazon disappointed investors with its third-quarter results sending the stock down more than 5% in the premarket. Weak guidance for the holiday season period also drove down the stock. “Margin concerns have shifted from only around the 1-Day push previously, now to AWS, which posted its lowest OM in two years,” Credit Suisse analyst Stephen Ju said in a note. “These moves will no doubt put Amazon in a tremendous competitive position, but we think waiting to later innings to buy the dip makes sense.” Wall Street ended Thursday on a slightly positive note on the back of earnings reports from Microsoft and Tesla. However, sharp declines in 3M and Twitter offset Microsoft and Tesla’s strong numbers. More than 38% of S&P 500 companies posted quarter earnings for the third quarter thus far, according to FactSet. Of those companies, 78% have beaten analyst expectations. The market focus Friday remains on the corporate sector. A-B InBev, Barclays and Verizon are among some of the major companies set to report earnings before the opening bell. Meanwhile U.S. Vice President Mike Pence said that Washington does not seek a confrontation with China, as both countries continue to work toward a trade deal. On the data front, there will be consumer sentiment figures out at 10:00 a.m. ET. In Europe, U.K. Prime Minister Boris Johnson is pushing for a general election on December 12, further increasing uncertainty around Brexit. Asia markets traded mixed on Friday as investors searched for guidance on developments in the U.S.-China trade war and in the U.K.’s planned departure from the European Union. The Nikkei 225 in Japan eked out a 0.22% gain to close at 22,799.81 while the Topix index added 0.29% to 1,648.44. In South Korea, the Kospi index erased earlier losses to rise 0.11% to 2,087.89. In Hong Kong, the Hang Seng index dropped 0.36% in late-afternoon trade. Chinese mainland markets erased early losses to climb in the afternoon: The Shanghai composite rose 0.48% to 2,954.93, the Shenzhen composite reversed losses to trade up 0.99% at 1,632.40 and the Shenzhen component index advanced 1.1% to 9,660.44. Oil prices steadied on Friday and were on track for strong weekly gains as support from a surprise draw in U.S. inventories and possible action from OPEC and its allies to extend output cuts outweighed broader economic concerns. Brent crude was up 4 cents at $61.71, and the benchmark is set for a weekly gain of nearly 4%. West Texas Intermediate (WTI) crude was unchanged at %56.23 per barrel, and is on track for a gain of more than 4% over the week. Gold steadied above $1,500 an ounce on Friday, on course for its best week in five amid continued uncertainty around Brexit and the health of the global economy while a sustained supply crunch propelled palladium to a record high. Spot gold was up 0.1% at $1,504.00 per ounce, having earlier hit its highest since Oct. 10 at $1,506.76. The precious metal has gained about 1% this week. U.S. gold futures were up 0.2% at $1,507.00.