Tuesday January 19th

19-01-2016

Dow futures briefly add 250 after China data; earnings eyed

U.S. stock index futures pointed to a sharply higher open on Tuesday, ahead of a number of financial earnings reports after a raft of data out of China in line with expectations. Earnings are expected to show the worst decline since the financial crisis, yet analysts are holding out hope that the bar is low, they'll beat and help pull the market out of its worst new year slump ever. Dow futures were up briefly up around 250 points in premarket trading, after the Chinese data and key financial earnings from Bank of America and Morgan Stanley. UnitedHealth also reported before the bell, as stock market reopens after the Martin Luther King day holiday on Monday. IBM, Netflix and Linear Tech are all due after market close. Other data due for release on Tuesday includes the NAHB housing index at 10:00 a.m. ET. Official data showed that China's gross domestic product data came mostly in line with market expectations, though factory output and retail sales dipped slightly below forecasts. The world's second-largest economy also grew by 6.8 percent in the fourth quarter of 2014, slipping by 0.1 percent from the third quarter's 6.9 percent growth. This was in line with the median forecast in a Reuters poll. Full-year growth same in at 6.9 percent, down from 2014's 7.3 percent, and the slowest pace of economic expansion since 1990. "The fear of a rapid slowdown in China is a big cause of concern to the world, given a dependence on it as one of the last big engines of global expansion," said head of global equities at Henderson Global Investors, Matthew Beesley. "Investors have temporarily lost their compass. Right now, they are still questions on whether rates should be rising in the U.S. and whether deflationary pressures still abounding, clearly we are seeing that in energy prices and I think investors are feeling dislocated to the "norm" they got used to post-2008," he told CNBC. In Europe, stocks traded around 1.5 percent higher following the Chinese data. Chinese stocks surged following the data, with the Shanghai Composite ending over 3 percent higher. In Japan, the Nikkei 225 wavered between gains and losses throughout the session before closing up 92.80 points, or 0.55 percent, at 17,048.37. At yesterday's close, the index was down some 18.74 percent from its 52-week high of 20,868.03, set in June 2015. Oil prices rose more than 5 percent on Tuesday as investors viewed bullish Chinese oil demand data as a buying trigger, but contracts remained near 12-year lows as the IEA said the market should stay oversupplied this year. Brent crude futures, the global benchmark, posted their strongest daily gains in four months, before easing back to trade up $1.05, or 3.7 percent, at $29.60 a barrel by 7:52 a.m. EDT (1252 GMT). U.S. crude futures were up 31 cents, or 1 percent at $29.73 a barrel, after earlier reverting to a discount to Brent prices. Gold edged lower on Tuesday as the dollar and equity markets rose after data showing China's weakest economic growth in years fanned stimulus hopes and spurred investors towards riskier assets. Spot gold was down 0.37 percent at $1,084.51 an ounce after a lethargic session on Monday when U.S. markets shut for the Martin Luther King holiday. U.S. gold for February delivery was down 0.57 percent at $1,084.50 an ounce.