US index futures have remained flat overnight with Dow and S&P futures trading down 0.1% this morning. Major European indices are also holding steady with the FTSE down 0.3% and the DAX down 0.6%.
Trading has taken a more cautious tone today in between significant developments. China’s GDP and other major data reports are all out now along with the first wave of big bank earnings from the US. China’s GDP was in line and industrial production was strong. Australia stocks and NZD rallied on the China news but other Asia markets were quiet suggesting that rallies made earlier in the week had already priced in the results.
Similarly, US indices have been steady with bank earnings providing scope for some cautious optimism, but broad markets may be waiting for confirmation of improved results from a broader range of sectors next week. Interestingly, yesterday’s better than expected results from Delta (NYSE:DAL) sparked a big rally for major airlines, indicating that positive surprises may have a bigger impact on individual stocks and sectors.
Crude oil is dropping back this morning with WTI retreating back toward the $40.00 level. Oil has had a big run upward in recent weeks on anticipation of this weekend’s big meeting between OPEC producers and Russia to nail down details of a production freeze. With the potential for a deal apparently already priced in and potential upside limited, some traders appear to be taking profits off the table ahead of the meeting in case anything goes wrong. It remains to be seen if Iran’s return to the market will become a sticking point that could derail a deal or if it just gets factored into the plan.
There are still a few developments that could move some markets today. In the US, earnings from Citigroup (NYSE:C) are still expected this morning along with Empire Manufacturing data. In Canada, some stocks could be active today: news that Mitel (TO:MNW) has agreed to purchase Polycom (NASDAQ:PLCM) for $1.96B could attract attention and Valeant (TO:VRX) could be active on social media rumours it is discussing its options with investment banks and more reports floating around in the press that Delta Air Lines could be preparing to place a big order for Bombardier (TO:BBDb) CSeries aircraft.