By Peter Nurse
Investing.com - U.S. stocks are set to edge higher at the open Tuesday, rebounding slightly after Monday’s late drop, helped by trading numbers from JPMorgan (NYSE:JPM). However, trading is likely to be cautious trading given a flare-up in Sino-U.S. tensions, new coronavirus restrictions and fresh corporate earnings.
At 07:40 AM ET (1140 GMT), S&P 500 Futures traded 13 points, or 0.4%, higher, Nasdaq Futures up 48 points, or 0.5%. The Dow Futures contract rose 157 points, or 0.6%.
There remains a degree of optimism surrounding this upcoming earnings season, despite FactSet estimating that S&P 500 companies overall will post a 10% decline in revenue and a 45% drop in earnings in the quarter.
With this in mind, JPMorgan (NYSE:JPM) stock climbed 2.4% premarket after posting record trading revenue in its second quarter, even though its net profit fell by nearly half from a year ago due to a mammoth $10.8 billion charge for provisions against bad loans.
Rivals Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are also set to reporting second-quarter results before the opening bell.
On Monday, the S&P 500 closed 0.9% lower, the Nasdaq Composite fell 2.1% and the Dow Jones Industrial Average ended flat, giving up early gains after California moved to shut down all indoor business activities.
The move by the most populous U.S. state came as the recent surge in the spread of the virus across hotspots, also including Florida, Arizona, and Texas, took the total U.S. infections to just under 3.4 million with around 135,000 deaths nationwide, according to data from Johns Hopkins University.
Adding to the reasons to be cautious was increased tension between China and the U.S., the globe’s two economic powerhouses. The cause of the latest war of words was over China’s territorial claims in the South China Sea, which the U.S. described as “unlawful”.
China said Tuesday it would impose sanctions on Lockheed Martin (NYSE:LMT), after the U.S. approved a possible $620 million deal for Taiwan to buy parts to refurbish defensive missiles made by the company.
Troubled airline Delta reported a $3.9 billion adjusted net loss in the quarter, including taking a $3.2 billion hit from Covid-19 related expenses, and warned a sustainable recovery in air traffic could take two years.
The main economic data release Tuesday will be the consumer price index for June, due at 8:30 AM ET (1230 GMT). Analysts expect CPI to rise 0.5% in June and notch a gain of 0.6% on the year. Core CPI is seen rising 1.1% year-over-year.
Oil prices weakened sharply on the Californian news, ahead of a meeting of OPEC’s technical staff on Tuesday and Wednesday. The meeting is expected to recommend the group and its allies, including Russia, stick with the current plan to taper its record supply cut of 9.7 million barrels per day to 7.7 million barrels a day from August.
American Petroleum Institute inventory data are also due later. At 3:45 AM ET, U.S. crude futures traded 0.9% lower at $39.73 a barrel, while Brent fell 0.7% to $42.41.
Gold futures fell 0.9% to $1,798.05/oz, while EUR/USD traded at 1.1378, up 0.3%.