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Top 5 Things to Know in The Market on Wednesday

EconomyAug 29, 2018 05:31AM 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 Wednesday, August 29:

1. Trade Headlines Remain in Focus

Markets will be watching for more trade-related headlines as optimism over the U.S.-Mexico trade deal gave way to caution ahead of an upcoming deadline in the Sino-U.S. trade dispute.

In Washington, Canada's Foreign Minister Chrystia Freeland was in talks to preserve a three-nation North American Free Trade Agreement (NAFTA) following Monday's deal between the United States and Mexico.

U.S. President Donald Trump warned that he could proceed with Mexico alone and levy tariffs on Canada if it does not come on board with the revised trade terms.

Yet even if Trump were to go with Mexico alone, Congress would have to approve the deal in a process that would take months and put it beyond the mid-term elections.

The White House has also said it wants to settle NAFTA before dealing with China, suggesting that trade dispute could run well into 2019.

The deadline for public comment on the Trump administration's increased tariffs on $200 billion of Chinese goods was less than a week away on September 5.

2. U.S. Q2 GDP - Second Estimate

Investors will get one of the week’s biggest economic reports when the second estimate of second quarter GDP is released at 8:30AM ET.

The data is expected to show that the economy grew at a 4.0% annual rate in the April-June quarter, a slight downward revision from a preliminary estimate of 4.1%.

That would still be the highest reading since the third quarter of 2014.

The current U.S. economic expansion, already the second longest on record, has been given extra fuel in the form of major tax cuts, which will help keep the chances of a major slowdown quite low for the rest of this year.

Besides the GDP report, today's economic calendar also features the July reading on pending home sales, which are forecast to rise 0.3% from the prior month.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was marked modestly higher at 94.75, pulling away from an overnight low of 94.34, which was the weakest level since August 1.

In the bond market, Treasury prices inched higher, pushing yields a tad lower across the curve. The benchmark 10-year yield stood at around 2.87%, while the 2-year yield was at 2.66%.

3. U.S. Stock Futures Point to Another Solid Session

U.S. stock index futures ticked higher, suggesting that equities could push even deeper into record territory, as major indexes aim for their fourth straight advance.

The blue-chip Dow futures were up 20 points, or around 0.1%, at 5:30AM ET, the S&P 500 futures tacked on 3 points, or around 0.1%, while the tech-heavy Nasdaq 100 futures indicated a gain of 19 points, or roughly 0.3%.

Wall Street ended slightly higher on Tuesday, with both the S&P 500 and the Nasdaq closing at records for the third consecutive session.

The day’s trading could be light, which is typical for late August, as it serves as the unofficial last week of summer ahead of the Labor Day holiday in the U.S.

Elsewhere, in Europe, the region's major bourses were largely unchanged in quiet mid-morning trade, with most sectors moving in opposite directions.

Earlier, in Asia, markets in the region ended mixed.

4. Last Wave of Earnings

The second quarter earnings season has all but wound down, however results today are expected from a few notable companies.

Earnings before the opening bell are expected from Brown Forman (NYSE:BFb), Dick’s Sporting Goods (NYSE:DKS), American Eagle Outfitters (NYSE:AEO), and Express (NYSE:EXPR).

After the close, (NYSE:CRM), PVH (NYSE:PVH), and Guess (NYSE:GES) are on deck.

CRM's results will be studied for the impact of the company’s recent acquisition of MuleSoft, the largest deal in its history.

5. EIA's Weekly Oil Supply Report

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended August 24 at 10:30AM ET.

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 38,000 barrels last week.

U.S. West Texas Intermediate WTI crude futures were up 25 cents at $68.78 a barrel.

International Brent crude oil futures were at $76.50 per barrel, 21 cents higher from their last close.

Crude futures were supported by indications of falling supplies from Iran ahead of U.S. sanctions, which will start to target its oil industry from November.

Top 5 Things to Know in The Market on Wednesday

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Peter Dikeakos
Peter Dikeakos Aug 29, 2018 5:59AM ET
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Bear capitulation happened on Monday, on FAKE NEWS THAT TRUMP DECIMINATED.
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Peter Dikeakos
Peter Dikeakos Aug 29, 2018 5:55AM ET
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Market, ready to keel over. Three down days will bring market negative for August. Have your cake but can't eat it.
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