Stocks are set to open lower, as investors look to bank profits, taking note of weakness in Asian and European markets.
Spread betting firm IG Index’s quotes indicate the Dow Jones will open around 73 points lower at 17,059 while the S&P 500 is expected to start at around 2,009, compared to last night’s close of 2,017.
Falling Chinese imports have put the frighteners on investors worldwide.
Data showed China's imports falling about a fifth, down for the 11th month in a row. The drop, the steepest in almost three years, cast more doubt over the health of Asia's economic powerhouse.
September imports dipped by a bigger-than-expected 17.7% in yuan-denominated terms, while exports fell 1.1% from a year earlier, according to official figures.
“Investors may be willing to cheer negative data when it’s coming from the US and potentially forcing the Fed to delay the dreaded rate hike but when the data points to further woes in emerging markets, increased pressure on Eurozone powerhouse Germany and further deflationary pressures in the UK, investors are not so happy,” suggested Craig Erlam, of foreign exchange trading platform OANDA.
“The most worrying aspect of the Chinese data was the 20.4% drop in imports, which points to further suffering for the countries trading partners in the region. Many emerging market countries are reliant on China for their exports and if domestic demand is declining, this potentially poses a big problem for them. It should be noted that this is a dollar-denominated decline and therefore overall trade volumes are not suffering to the same extent, but the situation is still worrying, particularly for commodity exporters to China,” he added.
On the US corporate front, shares in healthcare leviathan Johnson & Johnson (NYSE:JNJ) were initially lifted in pre-market trading by news of a US$10bn share buy-back program, but are now bobbing around last night’s close following the release of third quarter figures.
The firm found the market hard to please, as it beat earnings expectations and raised its outlook for the year.
Post-tax profit came in at US$3.36bn, down from US$4.75bn the year before, on sales of US$17.1bn, down 7.4% year-on-year and below the market consensus forecast of US$17.5bn.
Adjusted earnings per share of US$1.49 topped market expectations of US$1.43.
FMC (NYSE:FMC) shares are expected to come under pressure after the chemicals company reduced its Agricultural Solutions business unit’s earnings guidance for the third quarter and the year as a whole to take into account the decline in value of the Brazilian currency, the real.
Companies reporting after the bell today include computer chip giant Intel (NASDAQ:INTC) and investment banking behemoth JPMorgan Chase (NYSE:JPM).
On the subject of JPMorgan, Jes Staley, a former JPM banker, is reportedly set to take over at the helm of British bank Barclays (LON:BARC).