The Thursday Market Minute
- Wall Street futures suggest modest declines in cautious Thursday trading amid reports of a delay in the planned trade summit between Presidents Trump and Xi.
- European stocks hit a five-month high after UK lawmakers vote to remove "hard Brexit" risk, but significant uncertainty over the government's next steps, and today's vote on a Brexit extension, keep gains in check.
- Boeing shares look to extend their week-to-date decline, the worst in a decade, amid questions over the fate of its $600 billion 737 backlog after the global grounding of its MAX 8 and MAX 9 jets.
- Global oil prices extend gains, holding WTI crude near three-month highs, as OPEC cuts, US sanctions and a bigger-than-expected EIA drawdown continue to support markets.
- Dow futures little-changed ahead of weekly jobless claims and export price data at 8:30 am Eastern Time and earnings from Oracle, Dollar General, Broadcom and Adobe.
U.S. equity futures edged lower Thursday as investors remain wary of event risk linked to both Britain's impending exit from the European Union and seemingly stalled trade talks between Washington and Beijing.
British lawmakers removed at least one portion of that risk last night in London when they defeated a government motion and voted to remove the risk of a so-called Hard Brexit -- in which the UK exits the EU without a bespoke trade deal -- in a move that sent the pound surging and lifted regional stocks to their highest levels in nine months.
However, reports that a planned summit on trade between Presidents Donald Trump and Xi Jinping may be delayed until April clipped gains in both Europe and the United States, with investors also citing a packed of weak economic data from China -- including the softest reading for industrial output in at least 17 years -- as triggering the early market pullback.
Futures contracts tied to the Dow Jones Industrial Average, which had earlier indicated near triple-digit gains, were marked 5 points lower heading into the opening bell while those linked to the broader S&P 500 suggested a 1 point decline for the broader benchmark.
General Electric (GE) shares were an early market move, falling 2% in pre-market trading after it issued fresh 2019 earnings guidance Thursday that missed analysts' forecast, while confirming it will burn as much as $2 billion in cash in its industrial division, as CEO Larry Culp warns that the first quarter of this "reset" year will be the weakest for the troubled conglomerate.
Dollar General Corp. (DG) shares were also active, falling more than 6% in pre-market trading after it posted weaker-than-expected fourth quarter earnings Thursday and issued full-year profit guidance for 2019 that also fell shy of forecasts.
UK lawmakers will vote again today -- after sitting for the third time this week -- to extend the March 29 Brexit deadline, a request that must be granted by EU officials in Brussels. European Council President Donald Tusk said Thursday he would be open to a "long extension", but only if the UK "finds it necessary to rethink its Brexit strategy and build consensus around it."
European stocks touched a five-month high by mid-day in Frankfurt, with the Stoxx 600 rising 0.55%, while Britain's FTSE 100 booked a similar percentage gain even as the pound held at a nine-month high of 1.3226.
Global oil prices were little-changed in early New York trading, but were still marked past fresh four-month highs following yesterday's bigger-than-expected drawdown in domestic U.S. stockpiles and the ongoing OPEC+ production cuts.
The EIA said crude stocks fell by 3.86 million barrels in the week ending March 8, compared to a market expectation of a 2.7 million barrel buildup. U.S. crude production was also down by 100,000 barrels per day from the previous week, the EIA said, but still sits at a near-record 12 million barrels per day.
Brent crude contracts for May delivery, the global benchmark for oil prices, were marked 6 cents higher from their Wednesday close and changing hands at $67.61 per barrel while WTI contracts for April delivery, which are more tightly linked to U.S. gasoline prices, were seen 5 cents higher at $58.23 per barrel, the highest since November 12.