Wednesday January 16th


Stocks set to open higher on the back of strong bank earnings, Goldman jumps 2%

U.S. stock index futures rose on Wednesday as investors cheered strong quarterly earnings from major banks like Goldman Sachs and Bank of America. Dow Jones Industrial Average futures indicated a gain of 39.41 points at the open, while S&P 500 and Nasdaq 100 futures also pointed to slight gains. Goldman Sachs posted blowout quarterly earnings, sending the stocks up more than 2 percent. Bank of America also rose 5 percent after reporting a record quarterly profit. The reports follow the releases of fourth-quarter results from Citigroup, J.P. Morgan Chase and Wells Fargo earlier this week. Morgan Stanley, another major bank, is scheduled to report on Thursday. Separately, United Continental surged more than 5 percent after the company posted better-than expected earnings on Tuesday. Delta Air Lines and American Air Lines also rose more than 1 percent each before the bell Wednesday. Traders were also digesting news that the U.K. leader had lost a vote on her Brexit deal by 230 votes, which is believed to be the highest margin of defeat for any sitting government in British political history. May told lawmakers that her Conservative government “will listen” following the vote and that a statement will be made in Parliament on January 21 where the prime minister is due to present a “plan B” for the withdrawal agreement. U.K. opposition leader Jeremy Corbyn, who leads Britain’s Labour party, said he has tabled a motion of no confidence in the government that will be debated and voted on  Wednesday. Sterling was barely changed Wednesday, trading just below the flatline versus the dollar at $1.2855. Meanwhile, China’s central bank, the People’s Bank of China, made its biggest ever daily net cash injection via reverse repo operations, totaling $82.73 billion. The news came after comments from the Chinese state planner and Premier Li Keqiang suggested the country would inject more stimulus amid concerns of a slowdown in economic growth. Asia Pacific markets traded mixed on Wednesday despite an overnight rally on Wall Street as investors sifted through fresh uncertainties surrounding the U.K.’s withdrawal from the European Union. Japan’s Nikkei 225 fell 112.54 points, or 0.55 percent, to 20,442.75 while the Topix index slipped 4.95 points, or 0.32 percent, to 1,537.77. In South Korea, the Kospi rose 8.92 points, or 0.43 percent, to 2,106.1. Greater China markets were mixed, with Hong Kong’s Hang Seng Index erasing early losses to rise 0.13 percent in late-afternoon trade. The Shanghai composite was almost flat, while the Shenzhen composite and Shenzhen component index ended fractionally lower. In the previous session, the Dow Jones Industrial Average closed more than 100 points higher, with tech stocks supported by a boost in Netflix’s share price after the streaming giant said it would raise prices for its monthly subscriptions in the U.S. by 13 to 18 percent. That would be Netflix’s biggest price hike since it launched its streaming platform over a decade ago. Worries over trade weighed on Tuesday, however, after Sen. Chuck Grassley said U.S. Trade Representative Robert Lighthizer saw little progress in last week’s negotiations with China. Washington and Beijing have been engaged in a fierce battle of tariffs, with both hitting billions of dollars’ worth of each other’s imports with new duties. U.S. officials met with their Chinese counterparts last week for discussions which Trump said were “going very well.” The two countries have agreed to a 90-day trade truce during which they will hold off on increasing tariffs in the hope that an agreement is met. Oil prices edged down on Wednesday having climbed about 3 percent in the previous session, with worries about the global economy and forecasts of swelling U.S. production hurting sentiment. Brent crude oil futures were at $60.25 per barrel around 8:30 a.m. ET (1330 GMT), down 39 cents. U.S. West Texas Intermediate crude futures were down 54 cents, or 1 percent, at $51.57 a barrel. U.S. crude output is expected to rise to a new record of more than 12 million barrels per day this year, the Energy Information Administration said on Tuesday, adding that the U.S. will become a net crude exporter in late 2020. Gold held steady on Wednesday, supported by a slight retreat in the dollar while gains were capped by a modest recovery in equities, as caution set in ahead of a no-confidence vote on British Prime Minister Theresa May’s government. Spot gold was up 0.08 percent at $1,290.21 per ounce at 8:20 a.m. ET, and U.S. gold futures rose 0.13 percent at $1,290.10 per ounce. Gold seems to be finding a hurdle at $1,300, said Commerzbank analyst Carsten Fritsch, adding that physical demand for gold coins had picked up in Britain, aided by Brexit uncertainty.