US pre-open: Stocks seen lower as investors eye earnings, trade talks
Stocks on Wall Street looked set to drop at the open on Monday as investors eyed this week's trade talks between the US and China and a slew of earnings releases.
At 1220 GMT, Dow Jones Industrial Average and S&P 500 futures were down 0.4%, while Nasdaq futures were 0.5% lower.
Oanda analyst Craig Erlam said: "With so much to focus on this week, it could get quite volatile in the markets. Wednesday’s Fed decision may be the least impactful of the lot, with the central bank having indicated that it’s going to take a more patient approach to tightening and with no fresh projections due until March, it may just sit this one out. There will be a press conference though which could be interesting, with Powell having agreed to do one after every meeting starting this year.
"While the jobs report on Friday will always attract attention, the numbers are highly likely to be skewed by the shutdown so will be taken with a pinch of salt. That leaves the two big events this week, the vote in UK parliament on Theresa May’s plan B - and the amendments to it that are put forward - and the high level trade talks in Washington, with Vice Premier Liu He leading a delegation."
Although the temporary government shutdown came to an end on Friday, investors were likely to remain on edge after Trump told the Wall Street Journal over the weekend that another shutdown was "certainly an option".
Meanwhile, Sino-US relations will be in focus as Vice-Premier Liu is due to meet US Trade Representative Robert Lighthizer in Washington on Wednesday for two days of talks.
In corporate news, earnings are due from Caterpillar ahead of the opening bell and Whirlpool after the close, while tech giant Apple is slated to report its first-quarter earnings on Tuesday.
Russ Mould, investment director at AJ Bell, said investors will be looking for some reassurance after the profit warning earlier this month and the important numbers will not be those for Q1 but any guidance from boss Tim Cook about the second quarter and beyond.
"Using the mid-point of the revised guidance provided by Tim Cook on 3 January, Apple is expected to record an earnings per share figure of $4.16 for its fiscal first quarter," he said.
"That still represents year-on-year growth of some 7%, despite the 10% downgrades implied by the trading alert, but all of that increase comes from a drop in the tax charge and a lower share count following the company’s massive share buyback scheme."
On the data front, the Dallas Fed manufacturing business index for January is at 1530 GMT.