MARKET SNAPSHOT: U.S. Stocks Look Set To Pop Higher As Global Markets Try To Shake Off Turkish Tantrum
14 August 2018 - 11:07PM
Dow Jones News
By Mark DeCambre, MarketWatch
Home Depot's second-quarter results come in hotter than
expected
U.S. stock-index futures on Tuesday appeared set to rebound,
following the path of Europe's equity benchmarks, as worrisome
declines in Turkey's currency moderated somewhat.
Wall Street also scored a boost from upbeat results from
home-improvement giant Home Depot.
What are the benchmarks doing?
Futures for the Dow Jones Industrial Average rose 82 points, or
0.3%, at 25,296, those for the S&P 500 index advanced by .25
points, or 0.3%, at 2,833.75, and Nasdaq-100 futures climbed 30
points to reach 7,447, a rise of 0.4%.
On Monday
(http://www.marketwatch.com/story/us-stocks-poised-to-come-under-pressure-as-turkey-weighs-on-global-markets-2018-08-13),
the Dow shed 125.44 points, or 0.5%, to 25,187.70. The S&P 500
fell 11.35 points, or 0.4%, to 2,821.93, with energy and materials
sectors among the biggest losers. The Nasdaq Composite Index
finished down 19.40 points, or 0.3%, to 7,819.71. All three
benchmarks on Monday drifted in and out of positive territory,
pressured by seasonally low volumes and dogged by worries of
contagion fears from the Turkish lira.
What's driving markets?
Market participants focused on signs that Turkey is trying to
stem a tumble in its currency that has slashed a third of its value
over the past two weeks alone. On Monday, Turkey's central bank
pledged to provide "all the liquidity" the country's financial
institutions needed.
It is unclear if that will be enough to address many of the
economic challenges that Ankara faces under President Recep Tayyip
Erdogan, who has declined to lift interest rates as experts have
recommended and who has threatened the independence of the central
bank, while crossing swords with President Donald Trump over the
detention of a evangelical U.S. pastor Andrew Brunson.
Read:Strategists see 4 ways out of Turkey's currency crisis
(http://www.marketwatch.com/story/strategists-see-4-ways-out-of-turkeys-currency-crisis-2018-08-13)
Still, the lira found some runway higher as bulls, with some
market participants speculating that Turkey's crisis are
idiosyncratic and contained to the mostly Muslim country with a
population of about 80 million. Turkish liras were up more than 5%
against the U.S. dollar, with one dollar buying 6.5475 lira,
compared with 6.8846 lira late Monday in New York.
What else is in focus?
The National Federation of Independent Business small-business
optimism index
(http://www.marketwatch.com/story/nfib-small-business-sentiment-climbs-in-july-to-second-highest-level-in-history-2018-08-14)
rose 0.7 points in July to 107.9. The NFIB said it was the
second-highest level in history and just under the 1983 peak.
A reading of the cost of imported goods
(http://www.marketwatch.com/story/us-import-prices-rise-at-fastest-pace-in-6-12-years-2018-08-14)
was flat in July, but the yearly rate of increase jumped to the
highest level since February 2012, up an annualized 4.8%, the
government said Tuesday. Excluding fuel, import prices dropped 0.3%
last month and produced an annualized rise of 1.3%.
Looking further ahead, investors are awaiting a measure of
household debt for the second quarter set to be released at 11 a.m.
Eastern Time.
What are market participants saying?
"The Turkish Lira pulled back this morning, recovering some of
the ground lost in the last few days, as the central bank pledged
to inject foreign currency liquidity into the country's shaken
banking system. A measure that seems, at least for now, to have
stopped the bleeding, with the lira up 8% on the day [at its
peak]," wrote Ricardo Evangelista, senior analyst at U.K. based
online broker ActivTrades.
Which stocks are in focus?
Home Depot Inc.'s shares(HD) rose in premarket trade after the
home-improvement giant reported second-quarter results that were
better than average analysts' expectations.
Shares for Tesla Inc. (TSLA) were in focus after CEO Elon Musk
late Monday said
(http://www.marketwatch.com/story/elon-musk-says-hes-working-with-goldman-silver-lake-to-take-tesla-private-2018-08-13)in
a tweet
(https://twitter.com/elonmusk/status/1029171381584314368?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1029171381584314368&ref_url=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Felon-musk-says-hes-working-with-goldman-silver-lake-to-take-tesla-private-2018-08-13)
that he was working with Goldman Sachs and private-equity firm
Silver Lake in the electric-car maker's go-private plan. A separate
report indicated that Tesla had formed a special committee
(http://www.marketwatch.com/story/teslas-board-forms-special-committee-to-evaluate-potential-going-private-deal-2018-08-14-8914050)
to review take-private proposals, but didn't indicate that any
specific deal was on the table.
(END) Dow Jones Newswires
August 14, 2018 08:52 ET (12:52 GMT)
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