Tuesday April 19th


Stock futures are flat as investors take in earnings and rising rates

U.S. stock index futures were little changed early Tuesday morning as traders navigated one of the busiest weeks of corporate earnings season. Futures tied to the Dow Jones Industrial Average inched 2 points, or 0.01%, lower. Those for the S&P 500 slipped by 0.04%. Nasdaq 100 futures were lower by 0.04%. The move in futures comes after a slightly down day for stocks on Monday. The Dow and Nasdaq Composite each dipped 0.1%, while the S&P 500 inched lower by 0.02%. The major indexes have been grinding lower as the first-quarter earnings season heats up. Johnson & Johnson reported mixed quarterly results on Tuesday, with its earnings per share topping earnings expectations while revenue missed analyst estimates. The pharmaceutical company also lowered its earnings guidance for 2022. Its shares dipped slightly in premarket trading. Hasbro shares fell nearly 2% premarket after the toy company posted a weaker-than-expected profit for the previous quarter, while its revenue was in line with estimates. Travelers Companies was slightly higher in early trading after the company beat estimates on the top and bottom lines for its latest quarter and announced a 5.7% dividend increase. Lockheed Martin shares lost more than 2% premarket after the security and aerospace company reported an earnings beat and a revenue miss for the most recent quarter. Netflix and IBM are scheduled to post their numbers after the bell Tuesday. With inflation and the Federal Reserve’s next steps a key debate in markets, investors are watching for insight into how supply chains and consumer demand are performing for major companies. Expectations for Fed hikes have risen sharply in recent months, though the central bank has said it will be data dependent in deciding how it will hike rates throughout the year. “Can the Fed raising rates actually solve some of the shortages we have with labor, with semiconductors, with wheat? Probably not. So maybe they’re going to act a little bit less aggressively in the end than some people think,” said Adam Parker of Trivariate Research on “Closing Bell: Overtime.” The concern about the Fed’s next steps have caused high volatility in the bond market as well, which appears to have weighed on stocks in recent weeks. On Tuesday, the 10-year Treasury yield hit its highest level in three years, reaching 2.91%. St. Louis Fed president James Bullard told CNBC’s Steve Liesman on Monday that “quite a bit has been priced in” in terms of Fed actions. Elsewhere on Tuesday, investors will get an updated look at the housing market with housing starts and building permits for March. Shares in Asia-Pacific were mixed in Tuesday trade, as investors watched for market reaction to China’s central bank announcing financial support for Covid-hit sectors. Hong Kong’s Hang Seng index led losses among the region’s major markets as it dropped 2.28% to close at 21,027.76 in its return to trade following holidays on Friday and Monday. The Hang Seng Tech index declined 3.79% to 4,156.42. Mainland Chinese stocks struggled for gains in Tuesday trading, with the Shanghai composite closing fractionally lower at 3,194.03 while the Shenzhen component dipped 0.497% to 11,633.32. Elsewhere, the Nikkei 225 in Japan climbed 0.69% on the day to 26,985.09 while the Topix index gained 0.83% to 1,895.70. South Korea’s Kospi rose 0.95%, finishing the trading day at 2,718.89. Oil prices slipped in volatile trading on Tuesday as investors weighed demand concerns against tight global supplies after Libya halted some exports and as factories in Shanghai prepared to reopen following a COVID-19 shutdown. Brent crude was down $1.41, or 1.2%, to $111.75 a barrel, after rising more than $1 to $114.21 earlier in the session. U.S. West Texas Intermediate crude fell $1.64, or 1.5%, to $106.57 a barrel, after rising to $108.92 earlier. Gold eased on Tuesday after having touched a resistance at the $2,000 per-ounce level in the previous session, as the dollar rose to a two-year high and dented bullion’s appeal. Spot gold was down 0.06% at $1,977.25 per ounce, as of 0229 GMT. U.S. gold futures slipped 0.3% to $1,980.7. Gold climbed to $1,998.10 on Monday, buoyed by safe-haven demand, as the Ukraine crisis dragged on and inflation concerns mounted. However, the metal later gave up most gains as the dollar and U.S. 10-year Treasury yields firmed.