U.S. equity futures are pointing to a third day of declines on Wall Street Thursday as investors react to weaker-than-expected earnings in the tech and industrial sectors and signal increasing concern for the fate of U.S.-China trade talks.
Netflix (NFLX - Get Report) , the online video streaming service and the first of the so-called FAANG complex stocks to report second quarter earnings this season, disappointed investors with its first fall in U.S subscribers in eight years, as well as a notable miss in new additions from markets around the world in it quarterly report after the close of trading yesterday.
Those figures pushed shares sharply lower in pre-market trading Thursday, and were coupled with weaker-than-expected earnings, and a gloomy 2019 forecast, from rail operator CSX Corp. (CSX - Get Report) yesterday, which dragged transport stock on the Dow lower and highlighted the impact of the year-long U.S.-China trade dispute on the domestic economy.
That impact was echoed in data from Japan early Thursday, where a benchmark survey of manufacturing and business sentiment slumped to a three-year low and exports fell for the eighth consecutive month, sending the Nikkei 225 into a 2% tailspin.
U.S. markets look a bit more resilient in early futures trading Thursday, but are nonetheless expected to fall for a third straight session as contracts tied to the Dow Jones Industrial Average are marked 4 points higher and those linked to the S&P 500 indicate a 3.4 point pullback. Nasdaq Composite futures are suggesting a 33 point decline for the tech-focused benchmark.
Honeywell Inc. (HON - Get Report) posted stronger-than-expected second quarter earnings Thursday, and boosted its full-year profit guidance, as it aerospace division recorded double-digit sales growth thanks to strength in its U.S. and international defense and space business.
UnitedHealth Group (UNH - Get Report) posted stronger-than-expected second quarter earnings Thursday, and boosted its full-year outlook, as medicare & retirement, OptumRx and OptumHealth posted double-digit revenue growth.
Asia stocks were pulled lower by the weak Japan exports, as well as a Wall Street Journal that suggested trade negotiations between Washington and Beijing had stalled amid a disagreement on how to allow U.S. companies to export tech goods to China-backed Huawei Technologies.
European stocks were also weaker at the start of trading in Frankfurt, with the Stoxx 600 falling 0.4% on the back of weak industrial and basic resource stocks, while Britain's FTSE 100 slumped 0.44% as the pound crept modestly higher, to 1.2439 against the U.S. dollar, after hitting a 27-month low earlier in the week.
SAP SE (SAP - Get Report) shares plunged in early European trading after the cloud and business software firm posted weaker-than-expected second quarter earnings linked in part to global trade tensions.
SAP shares were marked 8% lower in early Frankfurt trading to change hands at ?,?112.01 each, while the broader European tech sector slumped 2.25%
Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, drifted 0.03% higher in overnight trading even as bond yields declined in safe-haven trading, with investors preferring positions in U.S. Treasury notes and the yen.Global oil prices were modestly firmer in the early European session, after falling more than 1% yesterday following a bigger-than-expected build in U.S. gasoline and distillate supplies, according to the Energy Information Administration, which offset a 3.1 million fall in domestic crude stocks.
Brent crude contracts for September delivery, the global benchmark, were seen 60 cents higher from their Wednesday close and changing hands at $64.26 per barrel in early European trading while WTI contracts for August, which are more tightly linked to U.S. gas prices, were marked 46 cents higher at $57.24 per barrel.
Jim Cramer Reveals Which Stocks He Would Buy Right Now and Why