Investing.com - Here are the top five things you need to know in financial markets on Wednesday, May 8:
1. China trade data shows exports weakening
China's exports unexpectedly shrank in April but imports surprised with their first increase in five months, painting a mixed picture of the Chinese economy as Washington attempts to increase pressure on Beijing ahead of high-level negotiations starting Thursday with threats of more tariffs.
The data contained little to soothe concerns over a global slowdown which economists fear will get worse if trade talks between the U.S. and China break down.
President Donald Trump has ordered tariffs on Chinese imports to increase from Friday. While Trump has insisted that China will bear the majority of the costs in the tariff increase, economists are skeptical. Although Erik Noland, senior economist at CME Group, believes that new tariffs could shave up to 1% off Chinese economic growth, he warns that U.S. corporate profits could also shrink by 3%.
2. Global stocks decline ahead of trade discussions
A sharp selloff on Wall Street a day earlier - with the Dow registering its second-largest percentage drop of the year, while both the S&P 500 and Nasdaq saw their third biggest drop - tainted global stocks on Wednesday.
China’s Shanghai Composite and Japan’s Nikkei 225 followed the decline, closing down more than 1%.
European stocks were also lower nearing midday trade as a positive boost from an unexpected increase in German industrial production ran out of steam.
U.S. futures pointed to a further drop ahead of the arrival of Chinese officials in Washington for two days of trade negotiations on Thursday and Friday. Dow futures dropped 86 points, or 0.3% by 5:45 AM ET (9:45 GMT), while S&P 500 futures fell 9 points, or 0.3%, and Nasdaq 100 futures traded down 30 points, or 0.4%.
3. Oil rebounds from 5-week low ahead of inventories
U.S. crude rebounded from a five-week low on Wednesday ahead of official U.S. government data on oil stockpiles after reports that Russia was taking longer than expected to fix quality issues with crude flowing through its largest export pipeline to Europe.
According to Bloomberg tracking data, only one of 13 tankers that had loaded at the affected Ust-Luga terminal had discharged its cargo. The slow pace of restoring Russian supply has supported higher oil prices.
Geopolitical risk premiums are also rising, after Iranian President Hassan Rouhani said that his country would reduce its “commitments” to the nuclear accord and could resume higher uranium enrichment.
The U.S. Energy Information Administration will release government figures on U.S. oil stocks at 10:30 AM ET (14:30 GMT) amid expectations for a build of 1.2 million barrels of crude and a 0.4 million draw in gasoline stockpiles. The American Petroleum Institute's data yesterday indicated a 2.8 million barrel increase in crude inventories last week.
4. Disney on tap for earnings
Amid a handful of earnings due Wednesday, Walt Disney (NYSE:DIS) will take pride of place after the market close.
On average, analysts expect that Disney earned $1.57 per share, according to forecasts compiled by Investing.com. Revenue is seen coming in around $14.5 billion.
Expectations have been buoyed by the unprecedented success of “Avengers: Endgame”, which has brought in more than $600 million at the domestic box office alone.
Disney shares are up 22% on the year, sixth among the 30 Dow stocks.
Read more: Disney’s Q2 Earnings Expected To Show Core Business Strength - Haris Anwar
5. Lyft loss casts shadow over Uber IPO
Shares in Lyft (NASDAQ:LYFT) fell 1.4% in premarket trade Wednesday after the company reported its first quarterly results since becoming a public company.
The ride-sharing company posted a wider-than-expected quarterly loss, although it managed to top revenue forecasts and provide second-quarter sales guidance that beat consensus. It said it expects losses to peak this year.
Quarterly numbers arrived amid news that Lyft was partnering with Alphabet's (NASDAQ:GOOGL) Waymo unit to provide self-driving cars in Phoenix.
Lyft’s results are a reminder of the struggle of ride-hailing companies to turn a profit, creating an awkward backdrop as rival Uber gears up for its own initial public offering. Uber (NYSE:UBER) is expected to price the offering on Thursday, with official trading set to start on Friday.