Investing.com - Here are the top five things you need to know in financial markets on Wednesday, July 19:
1. Morgan Stanley set to report as earnings wave continues
Investors would see a bit of a lull in the second quarter reporting season Wednesday after the prior session’s deluge with Morgan Stanley (NYSE:MS) set to be the main focus on the market radar.
The broker follows up on a disappointing report from Goldman Sachs (NYSE:GS) and plans to release its own numbers at approximately 7:00AM (11:00GMT).
The earnings season is still the beginning stages with only 47 of the S&P 500 firms having reported.
The Earnings Scout pointed out that 77% of those companies have beat profit estimates but that the growth rate of 13.5% had slowed from 14.9% in the first quarter for the exact same firms.
IBM (NYSE:IBM) was showing losses of nearly 3% in pre-market trade on Wednesday after the computer giant reported its 21st straight decline in revenues.
After the market close Wednesday, investors will focus on reports from American Express (NYSE:AXP) and Qualcomm (NASDAQ:QCOM).
2. Dollar rebounds ahead of housing data
The dollar was nursing losses near-multi-month lows against a currency basket on Wednesday in the wake of a steep selloff sparked by fears that U.S. President Donald Trump is having difficulties implementing his policy agenda.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ticked up 0.14% to 94.56 by 03.30 a.m. ET (07.30 a.m. GMT).
The index touched a low of 94.27 on Tuesday, the lowest trough since August 26, 2016 after Republican lawmakers pulled the plug on the latest version of a contentious bill to replace Obamacare, delivering a major policy blow to the Trump administration.
Wednesday’s rebound came ahead of housing starts and building permits for June that are set to be released at 8:30AM ET (12:30GMT).
3. Oil wavers ahead of U.S. inventory data
Oil was bouncing between gains and losses in early morning North American trade on Wednesday as investors looked ahead to official data on U.S. inventories and experts underlined the erratic movements in crude based on the slightest news.
Late Tuesday, the American Petroleum Institute said that U.S. oil inventories rose by 1.6 million barrels, compared to expectations for a draw of 3.5 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday, amid expectations for a draw of 3.2 million barrels.
U.S. crude oil futures gained 0.32% to $46.55 at 5:58AM ET (9:58GMT), while Brent oil traded up 0.43% to $49.05.
4. ECB and BoJ in market headlights
Investors in currency markets were adjusting positions ahead of policy announcements scheduled for Thursday from both the European Central Bank (ECB) and the Bank of Japan (BoJ).
In what seemed like an odd move, ECB policymaker Francois Villeroy de Galhau broke the central bank’s quiet period and insisted Wednesday that accommodative policy was still necessary.
Markets are not expecting the euro area monetary to make any changes but are concentrating on any hints from ECB president Mario Draghi that the time for a reduction of asset purchases in drawing near.
The BoJ is widely expected to be a non-event based on market expectations that the Asian monetary authority will lag behind other central banks in scaling back its massive monetary stimulus program.
5. Nasdaq set for fresh record high, global stocks rise
A weak U.S. dollar combined with upbeat Chinese data to lift emerging market and Asian shares to levels not seen in more than two years and global stocks to an all-time high on Wednesday.
U.S. stock futures pointed to muted open with the exception of tech shares that looked ready to break new record highs, all as investors kept an eye on earnings. At 5:59AM ET (9:59GMT), the blue-chip Dow futures slipped 0.03%, S&P 500 futures inched up 0.07% while the Nasdaq 100 futures gained 0.29%.
European shares traded mostly higher Wednesday as market players delved through earnings reports and looked ahead to the ECB announcement and press conference. At 5:59AM ET (9:59GMT), the
European benchmark Euro Stoxx 50 edged forward 0.07%, Germany’s DAX inched up 0.05%, while London's FTSE 100 advanced 0.13%.
Earlier, Asian closed higher with China’s Shanghai Composite leading gains, while Japan’s Nikkei 225 remained subdued ahead of the BoJ policy decision.