Uncertainty About U.S.-China Trade, Mixed Earnings May Lead To Choppy Trading

(RTTNews) - The major U.S. index futures are currently pointing to a roughly flat open on Wednesday, with stocks poised to extend the lackluster performance seen over the course of the previous session.

Uncertainty about trade tensions between the U.S. and China may keep some traders on the sidelines following the latest remarks from President Donald Trump.

During a lunch with Republican lawmakers in the White House Rose Garden on Tuesday, Trump said he expects to be able to reach a "good deal" with Chinese President Xi Jinping but also suggested a meeting between the two leaders may not happen.

"Maybe it won't happen," Trump said. "Things can happen where, for instance, maybe somebody will say, 'I don't want to meet, it's too nasty.' But it's really not nasty. It's just business."

Trump also indicated he may not follow through with a planned meeting with Russian President Vladimir Putin over the Russia-Ukraine war, saying he doesn't want to "have a waste of time."

Traders may also be reluctant to make significant moves amid another quiet day on the U.S. economic front ahead of the release of closely watched consumer price inflation data on Friday.

Early trading may be impacted by reaction to the latest earnings news, with shares of Netflix (NFLX) tumbling by 7.7 percent in pre-market trading after the streaming giant reported weaker than expected third quarter earnings.

Toy maker Mattel (MAT) is also likely to come under pressure after reporting third quarter results that missed analyst estimates.

On the other hand, shares of Intuitive Surgical (ISRG) are soaring by 18.4 percent in pre-market trading after the robotic-assisted surgery systems maker reported third quarter results that beat expectations.

Capital One (COF) is also likely to see initial strength after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

After moving notably higher over the two previous sessions, stocks turned in a relatively lackluster performance during trading on Tuesday.

The Nasdaq and the S&P 500 spent the day bouncing back and forth across the unchanged line, although the narrower Dow showed a more significant increase to reach a new record closing high.

The Dow pulled back well off its best levels of the day but still closed up 218.16 points or 0.5 percent to 46,924.74. The S&P 500 crept up 0.22 points or less than a tenth of a percent to 6,735.35, while the Nasdaq dipped 36.88 points or 0.2 percent to 22,953.67.

The advanced by the Dow partly reflected a sharp increase by shares of 3M (MMM), with the multinational conglomerate spiking by 7.7percent after reporting better than expected third quarter results.

Beverage giant Coca-Cola (KO) also surged by 4.1 percent after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

Dow components Salesforce (CRM), Amazon (AMZN) and Sherwin-Williams (SHW) also posted significant gains on the day.

Meanwhile, the lack of direction shown by the broader markets came as traders took a breather following the recent upward move.

While the corporate earnings season is off to a positive start, traders may have been reluctant to continue buying stocks amid lingering concerns about U.S.-China trade tensions and the ongoing government shutdown.

A lack of major U.S. economic data due in part to the shutdown may also have kept some traders on the sidelines ahead of the release of closely watched consumer price inflation data on Friday.

With most other economic reports indefinitely delayed, the inflation data could impact the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting next week.

Most of the major sectors ended the day showing only modest moves, although oil service stocks moved sharply higher, driving the Philadelphia Oil Service Index up by 2.3 percent.

Halliburton (HAL) helped to lead the sector higher, soaring by 11.6 percent after reporting better than expected third quarter results.

Housing stocks also turned in a strong performance on the day, with the Philadelphia Housing Sector Index climbing by 1.7 percent.

Retail stocks also saw notable strength, while gold stocks plummeted along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 10.0 percent.

Commodity, Currency Markets

Crude oil futures are jumping $1.19 to $58.43 a barrel after rising $0.22 to $57.24 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,046.90, down $62.20 compared to the previous session's close of $4,109.10. On Tuesday, gold plummeted $250.30.

On the currency front, the U.S. dollar is trading at 151.79 yen compared to the 151.93 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1584 compared to yesterday's $1.1598.

Asia

Asian stocks retreated on Wednesday, with renewed U.S.-China trade tensions and mixed U.S. earnings keeping investors on edge. Technology stocks paced the declines after a rally on Wall Street showed signs of fatigue.

China's Shanghai Composite Index finished marginally lower at 3,913.76 after U.S. President Donald Trump cast doubt on whether or not he will meet with Chinese leader Xi Jinping at a regional summit next week.

Hong Kong's Hang Seng Index slumped 0.9 percent to 25,781.77 on concerns higher U.S. tariffs and other trade issues could impact the semiconductor industry.

Japanese markets ended little changed, reversing initial losses after reports suggested that the new premier is preparing a sizeable stimulus package that could exceed last year's 13.9 trillion yen ($92.19 billion).

The Nikkei 225 Index finished marginally lower at 49,307.79 following two days of strong gains to record highs.

The broader Topix Index settled 0.5 percent higher at 3,266.43 after data showed Japanese exports rose for the first time in five months in September due to a boost from a weak yen.

Tech companies led losses, with technology investor SoftBank Group tumbling 4.9 percent and semiconductor test equipment supplier Advantest falling 1.7 percent.

Seoul stocks rallied as Trump embarks on a high-stakes Asian tour aiming to ease global trade tensions, rebuild alliances, and secure major investment deals.

The Kospi jumped 1.6 percent to 3,883.68, extending its winning streak to a sixth day and closing at a new record high, led by gains in chipmakers and automakers.

LG Chem soared 13 percent after London-based hedge fund Palliser Capital said the company's stock could double in value if the company refreshes its board buys back shares. Likewise, LG Energy Solution surged 4 percent following Palliser Capital's report on the firm.

Australian markets retreated from record highs as gold miners succumbed to heavy selling pressure after a stellar rally. Sector heavyweights like Northern Star Resources and Evolution Mining plummeted 9-10 percent.

Banks and energy stocks rose, helping limit the downside in the broader market. The benchmark S&P/ASX 200 Index slid 0.7 percent to 9,030, while the broader All Ordinaries Index fell 0.7 percent to 9,321.10.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed down 0.5 percent at 13,306.44, snapping a two-day winning streak.

Europe

European shares are turning in a mixed performance on Wednesday, as investors digest a flurry of corporate earnings and closely watched the latest trade developments between the United States and China.

U.K. stocks have outperformed as the British pound dropped after the release of soft inflation data. U.K. consumer prices registered stable growth in September, the Office for National Statistics reported.

Consumer prices rose 3.8 percent year-on-year in September, the same rate of growth as seen in August. Prices were expected to climb 4.0 percent.

A separate report revealed that input prices unexpectedly edged down by 0.1 percent in September, while the expected rate was +0.3 percent. Output prices remained flat compared to the forecast of 0.2 percent rise.

While the U.K.'s FTSE 100 Index is up by 1.0 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is down by 0.3 percent.

German sportswear giant Adidas has slumped despite reporting strong third-quarter results and raising its annual operating profit outlook.

Birkin bag maker Hermes has also tumbled. The French luxury group signaled a slight improvement in key market China after reporting a 9.6 percent rise in third quarter sales.

Beauty conglomerate L'Oreal has also moved sharply lower after reporting weaker-than-expected quarterly growth.

Dutch paint and coating maker Akzo Nobel has also shown a notable move to the downside after it reported a loss in its third quarter.

Italian bank UniCredit has also declined despite reporting higher profit and revenue in the third quarter.

Meanwhile, Ipsen has soared after the biopharma company upgraded its outlook after reporting better-than-expected third quarter results.

Barclays has also surged in London. The lender announced a surprise 500-million-pound ($670 million) share buyback and upgraded its performance target for the year.

Brewer Heineken has also moved to the upside despite reporting a steep drop in beer sales in the third quarter.

U.S. Economic News

The Energy Information Administration is due to release its report on crude oil inventories in the week ended October 17th at 10:30 am ET. Crude oil inventories are expected to rise by 2.2 million barrels after climbing by 3.5 million barrels in the previous week.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $13 billion worth of twenty-year bonds.

Federal Reserve Governor Michael Barr is due to deliver remarks on "Financial Inclusion" before the Crossing the Credit Barrier Conference hosted by the Federal Reserve Bank of St. Louis at 4 pm ET.