Market Snapshot: Stock futures edge higher as banks kick off earnings season

Stock-index futures point to a slightly higher start for Wall Street Tuesday as the corporate earnings reporting season gets fully under way for the third quarter and investors weigh the implications of a partial U.S.-China trade deal

How are the major benchmarks faring?

Futures on the Dow Jones Industrial Average YMZ19, +0.31%  rose 67 points, or 0.3%, to 26,813, while S&P 500 futures ESZ19, +0.31%  gained 10.25 points, or 0.3%, to 2,975.50. Nasdaq-100 futures NQZ19, +0.30%  rose 20 points, or 0.3%, to 7,877.50.

The Dow DJIA, -0.11%  edged 29.23 points lower on Monday to end at 26,787.36, a loss of 0.1%. The S&P 500 SPX, -0.14%  closed 4.12 points lower, down 0.1%, at 2,966.15, while the Nasaq Composite COMP, -0.10%  lost 8.39 points, or 0.1%, to finish at 8,048.65.

Read: 5 prominent U.S. companies are most at fault for the earnings recession

What’s driving the market?

Enthusiasm over a U.S.-China trade deal boosted stocks at the end of last week, but analysts said a lack of detail around planned tariff increases and other elements damped enthusiasm, leaving stocks to drift lower on Monday.

“The latest twist in the U.S.-China trade conflict is yet another reminder to investors not to get caught up in the hype,” said Han Tan, market analyst at FXTM, in a note. “Trying to bridge the conflicting interests between the world’s two largest economies is a gargantuan task; an undertaking that has already proven to be protracted and complicated.”

Speaking with reporters in London, St. Louis Fed President James Bullard said investors might be too optimistic about how long it takes to reach trade deals. He also emphasized that data on consumption, while strong, was “backwards looking” and said that was why he has been “emphasizing these downside risks and also emphasizing pre-emptive types of action to stay out of recession.”

Bullard dissented last month from the Federal Reserve’s decision to cut interest rates by a quarter point, calling instead for half-point decrease.

S&P 500 index company earnings are expected to fall 4.6% in the third quarter, according to Factset. This would be the first time that index company earnings have fallen for three straight quarters since the fourth of quarter of 2015 through the second quarter 2016, Factset analyst John Butters said.

Earnings forecasts focused on headwinds from the global economic growth slowdown and international trade policy uncertainty, with profit margins seen under pressure. However, corporate buybacks are again seen supporting earnings per share.

Which stocks are in focus?

Meanwhile, investors were parsing earnings reports from some of the largest banks on Wall Street. Shares of JPMorgan Chase & Co. JPM, +0.27%  were higher in premarket action after reporting revenue and earnings that rose more than expected.

Shares of Goldman Sachs Group Inc. GS, +0.56% GS, +0.56% were lower in premarket action after delivering earnings that came in below Wall Street estimates.

Shares of BlackRock Inc. BLK, +0.05%  were holding slight gains after reporting a smaller-than-expected fall in profit.

Check out: Banks look to put earnings recession in revers, but aren’t expected to succeed

Citigroup Inc. C, +0.20% stock edged lower after reporting third-quarter results.

Shares of Wells Fargo & Co. WFC, +0.12% were slightly higher following its earnings release.

Shares of UnitedHealthGroup Inc. UNH, -0.67%  jumped in premarket trade after earnings and revenue came in above expectations and after the health-care services company raised its full-year outlook.

Johnson & Johnson JNJ, -0.46%  shares were also higher in premarket after earnings and revenue rose more than Wall Street estimates, while the company raised its full-year guidance.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.96%  fell to 1.690% from 1.748% late Friday. Bond markets were closed Monday for the Columbus Day holiday.

In commodities markets the price of crude oil CLX19, -0.32%  fell about 63 cents to $52.95 on the New York Mercantile Exchange and Gold futures GCZ19, -0.04%  ticked up 60 cents to $1428.20 on Comex.

In Asia overnight, stocks trade mixed with Japan’s Nikkei NIK, +1.87%  rising 1.9%, the China CSI 300 000300, -0.43%  falling 0.4% and Hong Kong’s Hang Seng index HSI, -0.07%  falling 0.1%. In Europe, stocks were mostly high, as the Stoxx Europe 600 SXXP, +0.43%  added 0.4%.

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