U.S. Stocks May Give Back Ground In Early Trading
Stocks may come under pressure in early trading on Tuesday, giving back ground after ending the previous session mostly higher. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 122 points.
Initial weakness among shares of McDonald’s (MCD) may weigh on the markets, with the fast food giant moving to the downside in pre-market trading.
The drop by McDonald’s comes after the company reported weaker than expected second quarter earnings on a slightly bigger than expected drop in comparable-restaurant sales.
Diversified manufacturer 3M (MMM) is also likely to see initial weakness after reporting second quarter results that missed analyst estimates on both the top and bottom lines.
On the other hand, shares of Pfizer (PFE) may move to the upside after the drug giant reported better than expected second quarter results and raised its full-year guidance.
Uncertainty about the passage of a new coronavirus relief bill may also generate some selling pressure after Republicans unveiled their version of the legislation.
The GOP bill includes a reduction in unemployment benefits, which could lead to an impasse in negotiations with Democrats.
Shortly after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of July. The consumer confidence index is expected to pull back to 95.7 in July after jumping to 98.1 in June.
Nonetheless, overall trading may be somewhat subdued as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.
While the Fed is widely expected to leave interest rates unchanged, traders may look to the accompanying statement for clues about future plans to provide additional economic stimulus.
Following the pullback seen late last week, stocks moved back to the upside during trading on Monday. The tech-heavy Nasdaq showed a particularly strong upward move, as some traders cycled back into big-name tech stocks.
The major averages all closed in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq surged up 173.09 points or 1.7 percent to 10,536.27, the Dow rose 114.88 points or 0.4 percent to 26,584.77 and the S&P 500 climbed 23.78 points or 0.7 percent to 3,239.41.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index advanced by 0.7 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index is just below the unchanged line, the German DAX Index is down by 0.3 percent and the French CAC 40 Index is down by 0.7 percent.
In commodities trading, crude oil futures are slipping $0.17 to $41.43 a barrel after rising $0.31 to $41.60 a barrel on Monday. Meanwhile, after soaring $33.50 to $1,931 an ounce in the previous session, gold futures are falling $5 to $1,926 an ounce.
On the currency front, the U.S. dollar is trading at 105.13 yen compared to the 105.37 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1734 compared to yesterday’s $1.1752.
Source: Read Full Article