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 to extend the lackluster performance seen in the previous session.

Traders may continue to stick to the sidelines as they wait for the earnings reporting season to pick up steam in the coming days.

While a number of big-name companies have already reported their quarterly results, traders may wait until later this week to form an overall opinion of the quarter.

IBM Corp. (IBM) and Netflix (NFLX) are among the companies reporting their results after the close of today’s trading, while Procter & Gamble (PG), Tesla (TSLA), AT&T (T), American Express (AXP), and Verizon (VZ) are also due to repot their results this week.

Insurance giant Travelers (TRV) reported its first quarter results before the start of today’s trading and is seeing notable pre-market weakness despite reporting earnings that beat analyst estimates.

Shares of Johnson & Johnson (JNJ) may also move to the downside after the healthcare giant reported better than expected first quarter earnings but lowered its full-year guidance.

Meanwhile, shares of Hasbro (HAS) are likely to see initial strength after the toy maker reported first quarter earnings that missed analyst estimates but raised its full-year profit forecast.

With many traders sticking to the sidelines following the long, holiday weekend, stocks fluctuated over the course of the trading session on Monday. The major averages bounced back and forth across the unchanged line following the sharp pullback seen last Thursday.

The major averages eventually ended the session modestly lower. The Dow slipped 39.54 points or 0.1 percent to 34,411.69, the Nasdaq dipped 18.72 points or 0.1 percent to 13,332.36 and the S&P 500 edged down 0.90 points or less than a tenth of a percent to 4,391.69.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of a slew of earnings news this week.

Financial giant Bank of America (BAC) released its first quarter results before the start of Monday’s trading, reporting earnings and revenue that exceeded analyst estimates.

Traders may also have been looking ahead to the release of the Federal Reserve’s Beige Book, which may shed additional light on the outlook for interest rates.

On the U.S. economic front, the National Association of Home Builders released a report showing a continued deterioration in U.S. homebuilder confidence in the month of April.

The report showed the NAHB/Wells Fargo Housing Market Index fell to 77 in April from 79 in March, with the decrease matching economist estimates.

The housing market index declined for the fourth consecutive month, sliding to its lowest level since hitting 76 last September.

Despite the lackluster performance by the broader markets, biotechnology stocks moved sharply lower on the day, dragging the NYSE Arca Biotechnology Index down by 3.6 percent.

Nektar Therapeutics (NKTR) posted a steep loss after the biopharmaceutical company halted the global clinical development program for its cancer drug bempegaldesleukin in combination with Bristol Myers Squibb’s (BMY) Opdivo.

Significant weakness also emerged among airline stocks, as reflected by the 1.5 percent drop by the NYSE Arca Airline Index.

Pharmaceutical, healthcare and brokerage stocks also showed notable moves to the downside on the day, while energy stocks moved higher along with the price of crude oil.

With crude for May delivery jumping $1.26 to $108.21 a barrel amid outages in Libya, the Philadelphia Oil Service Index and the NYSE Arca Oil Index climbed 1.9 percent and 1.7 percent, respectively.

Semiconductor stocks also turned in a strong performance following recent weakness, with the Philadelphia Semiconductor Index advancing by 1.9 percent after ending the previous session at an eleven-month closing low.

Commodity, Currency Markets

Crude oil futures are tumbling $2.62 to $105.59 a barrel after jumping $1.26 to $108.21 a barrel on Monday. Meanwhile, after climbing $11.50 to $1,986.40 an ounce in the previous session, gold futures are slipping $4.70 to $1,981.70 an ounce.

On the currency front, the U.S. dollar is trading at 128.28 yen compared to the 126.99 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0797 compared to yesterday’s $1.0782.

Asia

Asian stocks ended mixed on Tuesday as all markets reopened following a long holiday weekend. Underlying sentiment remained cautious amid concerns surrounding inflation and China’s economic slowdown due to Covid-19 lockdowns.

Chinese shares fluctuated before ending marginally lower after authorities pledged support for businesses hit by the worst Covid-19 outbreak in two years.

Hong Kong’s Hang Seng Index plunged 2.3 percent to 21,027.76, dragged down by tech stocks after authorities in China announced a ban on the livestreaming of unauthorized video games.

Japan’s Nikkei 225 Index gained 0.7 percent to settle at 26,985.09 as a weaker yen boosted export-oriented shares, especially automakers despite Toyota announcing a cut to its production plans for May.

Nissan Motor jumped 3.9 percent, while Toyota Motor and Honda Motor added 1-2 percent.

Trading house Mitsubishi Corp. advanced 2.3 percent and oil refiner Eneos rose 2.2 percent after reports that they are considering the commercialization of sustainable aviation fuel.

Australian markets hit a 3-1/2-month closing high as higher commodity prices helped lift mining and energy stocks. Gold miners also pushed higher, tracking strength in bullion prices. The benchmark S&P/ASX 200 Index rose 0.6 percent to 7,565.20, marking its highest close since January 5.

Minutes of the Reserve Bank board’s most recent meeting added more weight to market views that the first rate hike may not be too far off.

Seoul stocks posted strong gains to snap a two-day losing streak. The Kospi climbed 1 percent, to 2,718.89 as investors scooped up large-cap chipmakers following a 1.9-percent overnight rally by the Philadelphia Semiconductor Index.

New Zealand’s benchmark NZX-50 Index dipped 0.5 percent to finish at 11,835.88 as trading resumed after the Easter break. Heavyweight Fisher & Paykel Healthcare lost 2.4 percent, while Meridian Energy advanced 2.3 percent.

Europe

European stocks have fallen on Tuesday, with rising bond yields, Russia’s renewed campaign in eastern Ukraine, worries over an economic slowdown and expectations of aggressive monetary tightening by the U.S. Federal Reserve keeping investors on edge.

Bonds climbed after St. Louis Fed President James Bullard said that rate increases of 75 basis points could be considered if needed to combat inflation.

While the French CAC 40 Index has slumped by 1.1 percent, the German DAX Index is down by 0.7 percent and the U.K.’s FTSE 100 Index is down by 0.5 percent.

France’s SCOR has moved sharply lower after the global reinsurance company said it expects the conflict in Ukraine and other natural catastrophes will cause it to report a loss for the first quarter of 2022.

Meanwhile, miners Anglo American and Antofagasta and Glencore have risen percent as copper and other industrial metals climb.

BP Plc and Royal Dutch Shell have also moved to the upside as oil prices stabilize after climbing to a three-week high on Monday.

Spectris, a supplier of precision instrumentation and controls, has jumped after announcing the sale of Omega Engineering to Arcline Investment Management for $525 million.

U.S. Economic Reports

New residential construction in the U.S. expectedly saw modest growth in the month of March, according to a report released by the Commerce Department on Tuesday.

The report showed housing starts rose by 0.3 percent to an annual rate of 1.793 million in March after spiking by 6.5 percent to a revised rate of 1.788 million in February.

The uptick surprised economists, who had expected housing starts to fall by 1.4 percent to a rate of 1.745 million from the 1.769 million originally reported for the previous month.

The Commerce Department said building permits also climbed by 0.4 percent to an annual rate of 1.873 million in March after slumping by 1.6 to a revised rate of 1.865 million in February.

Building permits, an indicator of future housing demand, had been expected tumble by 1.8 percent to a rate of 1.825 million from the 1.859 million originally reported for the previous month.

At 12:05 pm ET, Chicago Federal Reserve President Charles Evans is due to speak on current economic events and monetary policy before the Economic Club of New York.

Minneapolis Federal Reserve President Neel Kashkari is scheduled to join world-renowned epidemiologist Michael Osterholm for the Roslien Distinguished Lecture entitled “Pandemic Economics” at Luther College at 8 pm ET.

Stocks In Focus

Shares of Zendesk (ZEN) are moving sharply higher in pre-market trading after a report from Bloomberg said the customer service software developer is working with adviser Qatalyst Partners on a potential sale.

Office-sharing company WeWork (WE) is also likely to see initial strength after Piper Sandler initiated coverage of the company’s stock with an Overweight rating.

On the other hand, shares of Netgear (NTGR) is seeing significant pre-market weakness after the networking equipment maker reported preliminary first quarter results that missed analyst estimates.

Acadia Pharmaceuticals (ACAD) may also come under pressure after the biopharmaceutical said results from a Phase 2 trial of its experimental drug to treat post-operative pain did not meet its primary endpoint.