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Top 5 things to know in the market on Wednesday

EconomyAug 02, 2017 06:03AM ET
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© Reuters. 5 key factors for the markets on Wednesday - Here are the top five things you need to know in financial markets on Wednesday, August 2:

1. Apple soars 6% on earnings beat

Shares in Apple (NASDAQ:AAPL) soared more than 6% in pre-market trade on Wednesday after the tech giant reported strong fiscal third quarter earnings after the prior session’s close and said its upcoming iPhone release dates were on track.

Sales of iPhones also appeared to impress investors as the firm sold 41.03 million of its smartphone in its most recent quarter, topping analyst estimates and surpassing the milestone of 1.2 billion iPhones sold.

That was despite the fact that chief executive Tim Cook kept a lid on details about the upcoming release of its 10th anniversary iPhone.

“We have no comment on anything that’s not announced,” Cook said.

Among yet another deluge of earnings set for Wednesday, including highly anticipated numbers from the likes of Groupon (NASDAQ:GRPN), Time Warner (NYSE:TWX), Apollo Global Management (NYSE:APO), Humana (NYSE:HUM), Molson Coors Brewing (NYSE:TAP), Amarin (NASDAQ:AMRN), Sodastream (NASDAQ:SODA), Vulcan Materials (NYSE:VMC), Kemet (NYSE:KEM) or Nova (NASDAQ:NVMI), the main focus apart from reactions to Apple’s own report would likely focus on numbers from Tesla (NASDAQ:TSLA) out after the market close as market players fix to focus on what chief executive Elon Musk quoted as a “production hell” for the new Model 3.

Fitbit (NYSE:FIT), Marathon Oil (NYSE:MRO), T2 Biosystms (NASDAQ:TTOO), Exelixis (NASDAQ:EXEL), Square (NYSE:SQ), Oclaro (NASDAQ:OCLR), 3D Systems (NYSE:DDD), Immune Design (NASDAQ:IMDZ) or Chemours (NYSE:CC) will also among firms reporting after Wednesday’s close.

2. Dow set to face off against 22,000

With Apple set to lead the charge on Wednesday, Dow futures pointed to a break out from 22,000 points.

The index itself hit yet another record high on Tuesday, following up on what in July had been its strongest monthly performance since February.

The Dow has shown a strong track record recently busting through psychological milestones with the benchmark hitting 19,000 for the first time on November 22, 2016.

January 25 of this year, the Dow finished at 20,000 and closed at 21,000 for the first time as recently as March 1.

A close at or above 22,000 points on Wednesday would represent the seventh fastest 1,000-point move between milestones, having taken just 109 trading days.

That places it just behind the move from 17,000 to 18,000 points reached in December 2014 that took only 108 trading days.

At 5:59AM ET (9:59GMT), the blue-chip Dow futures rose 0.21%, S&P 500 futures inched up 0.07% while the Nasdaq 100 futures gained 0.78%.

European shares failed to follow Wall Street euphoria on Wednesday as financials, mining firms and oil stocks weighed on sentiment. At 6:00AM ET (10:00GMT), the European benchmark Euro Stoxx 50 lost 0.35%, Germany’s DAX fell 0.22%, while London's FTSE 100 traded down 0.46%.

Earlier, Asian tech stocks celebrated Apple’s success, hitting a 17-year peak.

3. Euro hits fresh 2-1/2 year highs against dollar

The euro rose to fresh two-and-a-half year highs against the broadly weaker dollar on Wednesday as deepening political turmoil in Washington continued to weigh on the greenback.

EUR/USD hit highs of 1.1868, the most since December 2014. It pulled back to 1.1833 by 6:01AM ET (10:01GMT).

The dollar came under renewed selling pressure as political risks in the U.S. continued to weigh.

The White House on Tuesday confirmed that U.S. President Donald Trump played a role in drafting a statement about his son’s meeting with a Russian lawyer during last year’s election campaign, which was later shown to be misleading.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.09% to 92.84 by 6:01AM ET (10:01GMT), after falling to 92.64 on Tuesday, its lowest since May 2016.

4. Employment data, Fed speakers to determine dollar’s fate

As the dollar hovered near a 15-month low against major rivals, investors looked ahead to the ADP employment report out at 8:15AM ET (12:15GMT) Wednesday.

Although not considered a reliable indicator for the official nonfarm payrolls report out Friday, markets still watch the data from the private payroll processor as an indicator of the health of the U.S. labor market.

The dollar had been supported by the Federal Reserve's (Fed) gradual policy tightening since late 2015 but the prospect that other major central banks may join it in the removal of accommodative policy have weighed.

With experts widely expecting the U.S. central bank to embark on balance sheet normalization in September and follow up with an additional rate hike at the end of the year, market players will also pay attention Wednesday to appearances by Cleveland Fed president Loretta Mester and San Francisco Fed chief John Williams later in the session.

5. Oil slips on inventory surprise ahead of official data

Oil prices declined for a second consecutive session on Wednesday as investors fretted over increasing U.S. crude inventories.

Late Tuesday the American Petroleum Institute's (API) said that U.S. crude stocks rose by 1.8 million barrels in the week ending July 28 to 488.8 million, missing forecasts for a draw of 2.9 million and denting hopes that recent inventory draws were a sign of a tightening U.S. market.

Official storage figures are due to be published by the U.S. Energy Information Administration at 10:30AM ET (14:30GMT) on Wednesday.

U.S. crude oil futures fell 0.28% to $49.02 at 6:02AM ET (10:02GMT), while Brent oil traded down 0.12% to $51.72.

Top 5 things to know in the market on Wednesday

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Victoria Rich Aug 02, 2017 9:04AM ET
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