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Top 5 Things to Know in The Market on Tuesday

EconomyNov 06, 2018 05:40AM ET
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© Reuters. Top 5 things to know today in financial markets - Here are the top five things you need to know in financial markets on Tuesday, November 6:

1. U.S. Midterm Elections

Control of both houses of the U.S. Congress, currently dominated by Republicans, and 36 governors' offices will be at stake when Americans vote in Tuesday's midterm elections.

Opinion polls and nonpartisan forecasters generally show Democrats with a strong chance of regaining control of the House of Representatives, while President Donald Trump's Republican party is forecast to hold on to a slim majority in the Senate.

This outcome is largely seen as positive for markets since, historically, U.S. stocks have posted solid gains during government gridlock.

If the Republicans retain their House majority, global stocks are likely to rally on hopes of more tax cuts. Meanwhile, a so-called Democratic sweep could pressure markets as it could lead to a reversal of some of the Trump administration's pro-growth policies.

Preliminary results should start coming in during U.S. evening hours, while the wait for a conclusive result could stretch into early morning hours on Wednesday.

2. U.S. Futures Point to Lower Open

U.S. stock futures pointed to a lower open on Wall Street, as investors remained cautious ahead of U.S. congressional midterm elections later in the day.

At 5:35AM ET (1035GMT), the blue-chip Dow futures were down 47 points, or about 0.2%, the S&P 500 futures declined 6 points, or around 0.3%, while the tech-heavy Nasdaq 100 futures indicated a loss of 30 points, or roughly 0.4%.

Stocks ended mixed on Monday, as the Dow and S&P 500 ending higher, but a drop in Apple (NASDAQ:AAPL)'s shares dragged down the Nasdaq.

Elsewhere, shares in Europe dipped, as investors punished companies like Zalando (DE:ZALG) and Pandora (CO:PNDORA) that missed expectations.

Earlier, Asian stocks were mostly mixed.

3. Another Batch of Earnings

Dozens of companies are expected to release earnings today in one of the last big waves of the third-quarter earnings season.

Ahead of the opening bell, results are due from CVS (NYSE:CVS), Eli Lilly (NYSE:LLY), Ralph Lauren (NYSE:RL), Archer-Daniels-Midland (NYSE:ADM), Thomson Reuters (NYSE:TRI), and Regeneron Pharmaceuticals (NASDAQ:REGN).

Etsy (NASDAQ:ETSY), Twilio (NYSE:TWLO), Match Group (NASDAQ:MTCH), Papa John's (NASDAQ:PZZA), Planet Fitness (NYSE:PLNT), Wendy’s (NASDAQ:WEN), and Turtle Beach (NASDAQ:HEAR) report after the market close.

4. Dollar Ticks Higher in Tight Range

The dollar index, which measures the greenback’s strength against a basket of six major currencies, ticked up 0.1% to 96.22. The index traded in a relatively tight range between 96.02 and 96.26.

On the data front, the economic calendar will bring investors the latest JOLTS report, which is expected to show job openings in September remained near a record high.

Currency traders also awaited the Federal Reserve meeting due to begin on Wednesday to gauge the outlook for U.S. monetary policy. While the Fed is not expected to raise interest rates this week, it is likely to signal that it remains on track to do so in December.

5. Oil Prices Decline Ahead of API Report

Oil prices traded near their lowest level in almost seven months ahead of the release of fresh weekly data on U.S. commercial crude inventories.

The American Petroleum Institute is due to release its weekly report for the week ended November 2 at 4:30PM ET (2130GMT), amid expectations of an increase of about 2.0 million barrels. If confirmed, it would be the seventh straight weekly climb in domestic crude supplies.

U.S. West Texas Intermediate WTI crude futures were down 22 cents, or roughly 0.3% at $62.87 a barrel, after hitting $62.52 on Monday, the lowest since April.

International Brent crude oil futures fell 34 cents, or 0.4%, to $72.83 per barrel, near Friday's two-and-a-half-month low of $72.16.

Top 5 Things to Know in The Market on Tuesday

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