Futures Pointing To Roughly Flat Open On Wall Street

Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely show a lack of direction in early trading.

Traders may be reluctant to make significant moves ahead of remarks by Federal Reserve Chair Jerome Powell later in the day.

Powell’s comments in a conversation with David Rubenstein, Chairman of the Economic Club of Washington, D.C., may provide additional clues about the outlook for interest rates.

Following the sharp pullback seen last Friday, stocks saw further downside during trading on Monday. With the decline, the Nasdaq and S&P 500 fell further from multi-month highs.

The major averages all closed in negative territory, although the Dow showed a relatively modest drop, edging down34.99 points or 0.1 percent to 33,891.02.

The tech-heavy Nasdaq tumbled 119.50 points or 1.0 percent to 11,887.45, while the S&P 500 slid 25.40 points or 0.6 percent to 4,111.08.

Concerns about the outlook for interest rates continued to weigh on Wall Street following last week’s stronger than expected jobs data.

Trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

The economic calendar remains relatively light throughout the week, although traders are likely to keep an eye on remarks by Federal Reserve Chair Jerome Powell on Tuesday.

After last week’s interest rate increase, traders are likely to look to Powell’s comments for additional clues about the outlook for further rate hikes.

Computer hardware stocks saw considerable weakness on the day, resulting in a 2.3 percent slump by the NYSE Arca Computer Hardware Index.

Dell Technologies (DELL) posted a steep loss after announcing plans to cut about 6,650 jobs or approximately 5 percent of its global workforce.

Significant weakness was also visible among steel stocks, as reflected by the 2.0 percent drop by the NYSE Arca Steel Index.

Housing, semiconductor and gold stocks also saw notable weakness, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are climbing $0.98 to $75.09 a barrel after climbing $0.72 to $74.11 a barrel on Monday. Meanwhile, after inching up $2.90 to $1,879.50 an ounce in the previous session, gold futures are edging down $0.40 to $1,879.10 an ounce.

On the currency front, the U.S. dollar is trading at 131.95 yen compared to the 132.66 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0691 compared to yesterday’s $1.0726.

Asia

Asian stocks ended mixed on Tuesday and the dollar rally paused as investors assessed the outlook for growth and interest rates in developed economies.

Investors awaited a speech by Federal Reserve Chairman Jerome Powell at the Economic Club of Washington later in the day for clues to any change in the U.S. central bank’s rhetoric.

Chinese shares rebounded on continued optimism surrounding China’s reopening with the world.

The benchmark Shanghai Composite index rose 0.29 percent to 3,248.09 while Hong Kong’s Hang Seng index gained 0.36 percent to settle at 21,298.70.

Japanese shares surrendered early gains as the yen rose on data showing a rise in real wages for the first time in nine months. Separate data showed that household spending fell for a second month in December.

The Nikkei average finished marginally lower at 27,685.47 while the broader Topix index closed 0.21 percent higher at 1,983.40.

JFE Holdings plunged 8.5 percent after cutting its full-year steel output and profit estimates. Banks performed well, with Sumitomo Mitsui Financial and Mitsubishi UFJ Financial climbing 2-3 percent.

Seoul stocks posted modest gains after a sharp fall in the previous session. The Kospi average gained 0.55 percent to end at 2,451.71, led by big-cap tech stocks.

Australian markets reversed course to end lower as investors reacted to the Reserve Bank’s hawkish commentary.

The central bank hiked the cash rate by 25 bps to a 10-year high and hinted that further interest-rate increases will be needed in coming months to tackle inflation.

The benchmark S&P/ASX 200 slipped 0.46 percent to 7,504.10 while the broader All Ordinaries index closed 0.42 percent lower at 7,713.10.

Rate-sensitive property stocks led declines, with Goodman Group and Stockland falling around 2 percent each. Coal miners advanced, with Whitehaven and New Hope rising 1.9 percent and 3.7 percent, respectively.

Nuix soared 43.7 percent to hit a 10-month high of $1.30 after the embattled tech company won a Federal Court ruling against former CEO Edward Sheehy.

Europe

European stocks were seeing modest gains in choppy trade on Tuesday, as growth worries lingered, and investors awaited a speech by Federal Reserve Chairman Jerome Powell later in the day for clues to any change in the U.S. central bank’s rhetoric.

The pan-European STOXX 600 was up 0.3 percent at 458.62 after declining 0.8 percent on Monday.

The German DAX and France’s CAC 40 were marginally higher, while the U.K.’s FTSE 100 rose 0.4 percent, led by gains in the energy sector.

Danish brewer Carlsberg fell 1.5 percent after it slipped to a net loss in FY22 and forecast organic profit growth in 2023 below last year’s level.

Switzerland’s Ams OSRAM plunged 17 percent. The company has decided to suspend its cash dividend policy for fiscal 2022 to focus on strengthening its business position in 2023.

Ambu soared 17 percent after the Danish medical device company reported strong first-quarter revenue results and maintained 2022/23 guidance.

Oil major BP Plc soared almost 4 percent after it posted a record annual profit, in line with increasing natural gas and oil sales from rising prices.

Peer Shell gained about 1 percent as oil extended gains from the previous session on worries about supply issues resulting from the shutdown of a significant export facility after a powerful earthquake in Turkey.

BNP Paribas added 1.3 percent. The French lender raised its 2025 targets and announced a 5 billion-euro share buyback program in 2023, despite posting a lower-than-expected profit in the fourth quarter.

German software provider TeamViewer soared 14 percent after it launched a share buyback and announced it is eyeing double digit growth in 2023.

Drug discovery and development firm Evotec SE fell 1.5 percent after its Supervisory Board appointed Laetitia Rouxel as new Chief Financial Officer and member of the Management Board effective 1 April 2023.

U.S. Economic Reports

The Commerce Department released a report on Tuesday showing an increase in the size of the U.S. trade deficit in the month of December.

The report said the trade deficit widened to $67.4 billion in December from a revised $61.0 billion in November. Economists had expected the deficit to widen to $68.5 billion from the $61.5 billion originally reported for the previous month.

The increase in the size of the trade deficit came as the value of imports jumped by 1.3 percent to $317.6 billion, while the value of exports fell by 0.9 percent to $250.2 billion,

At 12:40 pm ET, Federal Reserve Chair Jerome Powell is scheduled to participate in a conversation hosted by the Economic Club of Washington.

The Treasury Department is due to announce the results of this month’s auction of $40 billion worth of three-year notes at 1 pm ET.

At 2 pm ET, Federal Reserve Vice Chair for Supervision Michael Barr is scheduled to speak on Financial Inclusion before the Banking on Financial Inclusion HOPE Economic Mobility Forum.

The Federal Reserve is scheduled to release its report on consumer credit in the month of December at 3 pm ET. Consumer credit is expected to increase by $24.0 billion.