TOKYO (AP) — Global shares were mixed in muted trading Tuesday amid continuing uncertainty over trade tensions between China and the U.S. Investors were watching for U.S. retail sales data due out later in the day.
KEEPING SCORE: France’s CAC 40 inched up less than 0.1 percent in early trading to 5,543.88, while Britain’s FTSE 100 added 0.2 percent to 7,724.36. Germany’s DAX slipped 0.2 percent to 12,957.66. U.S. shares were set to drift lower with Dow futures down 0.2 percent at 24,827. S&P 500 futures were also lower, down nearly 0.3 percent at 2,724.
ASIA’S DAY: Japan’s benchmark Nikkei 225 edged 0.2 percent lower to 22,818.02. Australia’s S&P/ASX 200 lost 0.6 percent to 6,097.80. South Korea’s Kospi slipped 0.7 percent to 2,458.54 while Hong Kong’s Hang Seng dropped 1.2 percent to 31,152.03. The Shanghai Composite climbed 0.6 percent to 3,192.12.
CHINA FACTOR: President Donald Trump tweeted Sunday that he was working with President Xi Jinping of China to put Chinese telecom ZTE “back into business, fast” after U.S. sanctions threatened ZTE’s existence and 70,000 Chinese jobs. Trade talks were due to resume in Washington on Tuesday. Trump has proposed imposing tariffs on up to $150 billion in Chinese products. In retaliation, Beijing is threatening tariffs on $50 billion in U.S. products.
WALL STREET: The S&P 500 index added 2.41 points, or 0.1 percent, to 2,730.13 on Monday. The Dow Jones industrial average climbed 68.24 points, or 0.3 percent, to 24,899.41. The Nasdaq composite rose 8.43 points, or 0.1 percent, to 7,411.32. Small-company stocks fell. The Russell 2000 index lost its early gains, sliding 6.45 points, or 0.4 percent, to 1,600.34.
THE QUOTE: “There’s a number of data releases that will grab traders’ attention today and could determine whether we see an early rebound in stock markets. The most notable of these is the retail sales data for April, which is expected to be relatively good for a second consecutive month following a few poor numbers that were a little worrying,” Craig Erlam, a senior market analyst for Oanda, said in a commentary.
ENERGY: Benchmark U.S. crude oil gained 13 cents to $71.09 a barrel in electronic trading on the New York Mercantile Exchange. It rose 26 cents to $70.96 a barrel in New York on Monday. Brent crude, used to price international oil, gained 40 cents to $78.63 a barrel in London.
CURRENCIES: The dollar rose to 109.90 yen from 109.53 yen late Monday. The euro weakened to $1.1927 from $1.1974.
– Here are the top five things you need to know in financial markets on Tuesday, May 15:
1. U.S. Retail Sales In Focus
The Commerce Department will publish data on retail sales for April at 8:30AM ET (12:30GMT).
The consensus forecast is that the report will show retail sales rose 0.4% last month, moderating from a gain of 0.6% in March. But excluding the automobile sector, sales are expected to increase 0.5%, after a 0.2% rise a month earlier.
Economists reckon the data will help further shape the debate over how many times the Federal Reserve will raise interest rates through the end of this year after somewhat disappointing inflation figures out of the U.S. last week.
On the central bank front, market players will pay close attention to comments from incoming New York Fed President John Williams, who is due to speak at the Economic Club of Minnesota’s May Luncheon at 12:45PM ET (1645GMT).
In addition, the nominee for Fed vice chairman, Richard Clarida, as well as Michelle Bowman, who was nominated to be a Fed governor, will both face Congress on Tuesday for their confirmation hearings.
Investors have fully priced in a rate rise at the Fed’s next policy meeting on June 12-13. However, Wall Street is divided over how many more time the central bank will raise interest rates after that.
2. Home Depot Reports Earnings
As earnings season draws to a close, Home Depot (NYSE:HD) is one of the last notable names slated to report fiscal first-quarter results before U.S. markets open on Tuesday.
The home improvement retailer is expected to report earnings of $2.06 per share on revenue of $25.2 billion, according to estimates.
Investors will likely be particularly interested to hear how poor winter weather across much of the U.S. in the first three months of the year affected same store sales, which are expected to post a 5.7% increase.
Shares were trading little changed in premarket trade.
Home Depot kicks off a busy week of retail earnings; results from Macy’s (NYSE:M) are on the agenda for Wednesday; while Walmart (NYSE:WMT), the world’s largest retailer, is due to report results on Thursday.
3. Dow’s 8-Session Win Streak In Jeopardy As Futures Dip
U.S. stock futures edged lower, indicating the Dow could struggle to stretch its eight-session winning streak into another day.
U.S. stocks ended higher on Monday, with the Dow marking its eighth-straight advance – its longest winning streak since a nine-session climb in September.
Elsewhere, in Europe, the continent’s major bourses were mixed, with most sectors pointing in opposite directions.
Earlier, in Asia, markets in the region closed lower, as investors turned cautious after soft Chinese economic data.
4. Oil Continues Higher Ahead Of API Data
Oil prices remained on the front foot, with Brent prices extending gains to hit another 2014 high, as looming U.S. sanctions against Iran continued to provide support.
Investors now turned their attention to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT), amid forecasts for an oil-stock drop of around 1.4 million barrels.
5. Second Round Of U.S.-China Trade Meetings Kick Off
Four days of tense U.S.-China trade talks between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are due to kick off today in Washington.
Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer are among the U.S. officials also participating in the meetings.
The talks are taking place after President Donald Trump offered a lifeline to struggling Chinese telecom giant ZTE (HK:0763), with the move seen by some analysts as a concession from the U.S. side.
High-level discussions in Beijing earlier this month appeared to make little progress but there have been signs recently of some easing in tensions.
The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies.