U.S. Stocks May See Initial Weakness As First Republic Renews Banking Concerns

After ending yesterday’s lackluster session narrowly mixed, stocks may move to the downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Negative sentiment may be generated in reaction to quarterly results from First Republic (FRC), with the regional bank plunging by 21.4 percent in pre-market trading.

The steep drop by First Republic comes after the company reported a loss of more than $100 billion in deposits in the first quarter, renewing concerns about turmoil in the banking sector.

Shares of UPS Inc. (UPS) may also come under pressure after the delivery giant reported weaker than expected first quarter results and forecast full-year revenue at the lower end of its prior forecast.

On the other hand, shares of General Motors (GM) are likely to see initial strength after the auto giant reported first quarter results that exceeded analyst estimates and raised its full-year guidance.

Other big-name companies like PepsiCo (PEP), McDonald’s (MCD) and 3M (MMM) may also move to the upside after reporting better than expected quarterly earnings.

Overall trading activity may remain somewhat subdued, however, as traders look ahead to quarterly results from Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT) after the close of trading.

Shortly after the start of trading, the Commerce Department is due to release its report on new home sales in the month of March. Economists expect new home sales to dip to an annual rate of 634,000 in March from a rate of 640,000 in February.

The Conference Board is also scheduled to release its report on consumer confidence in the month of April. The consumer confidence index is expected to edge down to 104.0 in April from 104.2 in March.

Following the lackluster performance seen last Friday, stocks continued to show a lack of direction over the course of the trading session on Monday. The major averages once again spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day mixed. While the Nasdaq fell 35.25 points or 0.3 percent to 12,037.20, the S&P 500 inched up 3.52 points or 0.1 percent to 4,137.04 and the Dow rose 66.44 points or 0.2 percent to 33,875.40.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. While Japan’s Nikkei 225 Index bucked the downtrend and crept up by 0.1 percent, China’s Shanghai Composite Index fell by 0.3 percent and Hong Kong’s Hang Seng Index tumbled by 1.7 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slid by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.2 percent and the German DAX Index is just below the unchanged line.

In commodities trading, crude oil futures are falling $0.48 to $78.28 a barrel after climbing $0.89 to $78.76 a barrel on Monday. Meanwhile, after rising $9.30 to $1,999.80 an ounce in the previous session, gold futures are slipping $8.80 to $1,991 an ounce.

On the currency front, the U.S. dollar is trading at 134.14 yen compared to the 134.24 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1024 compared to yesterday’s $1.1046.

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