US pre-open: Stocks seen steady amid renewed trade tensions; Apple numbers eyed
US stocks looked set for a muted open on Tuesday amid fresh trade tensions between the US and China and as a slew of high-profile earnings rolled in.
At 1210 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all flat.
Market participants were looking ahead to the two days of Sino-US trade talks that kick off in Washington on Wednesday, after the US Justice Department filed a host of criminal charges against Chinese telecoms company Huawei and its chief financial officer, Meng Wanzhou. Huawei has denied any wrongdoing.
The US delegation will be led by Trade Representative Robert Lighthizer and will include Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross, President Trump's policy advisers Larry Kudlow and Peter Navarro. The Chinese delegation will be led by Vice Premier Liu He.
Oanda analyst Craig Erlam said: "Trade talks between the US and China appeared to be going rather well until last week when speculation started circling that a preparatory meeting prior to Liu He’s visit this week had been cancelled. While this was denied by Larry Kudlow, it was followed by claims that the two sides are miles and miles from a deal and now another spanner has been thrown in the works, with the US filing numerous charges against Chinese telecom giant Huawei.
"Huawei has long been a target of the US so these charges aren’t necessarily surprising but the timing of them is curious. For now, it threatens to ratchet up tensions between the world’s two largest economies, as they work towards a deal that prevents further tariffs and ideally removes those already imposed. Only time will tell whether the charges damage negotiations or serve as a tool to progress the talks."
In corporate new, Pfizer was nearly 2% lower in pre-market trade after its fourth-quarter earnings and revenue beat expectations but the pharmaceutical company's guidance for 2019 fell short.
Xerox looked poised for gains as its fourth-quarter profit beat expectations but revenue declined more than expected, while shares in 3M, Verizon, Harley-Davidson and Biogen were also likely to be active after the release of their quarterly numbers.
The main event was set to take place after the close, however, with tech giant Apple and Ebay slated to report quarterly earnings.
CMC Markets analyst Michael Hewson said: "With concerns about a China slowdown at the forefront of investor thinking and the big drop in Nvidia’s share price yesterday all eyes will turn to Apple’s Q1 numbers later today after the bell, after the falls seen yesterday.
"The decision to revive its cheaper iPhone SE model earlier this month appears to be a nod to the fact that sales are struggling, with particular attention likely to be on the average selling price number, for signs that sales are slowing at the top end. In November this came in at $793, the fourth successive quarter it’s been above $700.
"A sharp drop here would suggest that demand for the more expensive models is slowing sharply and that peak iPhone or Apple fatigue is creeping in as consumers tire of the incessant minor upgrades, and lack of innovation elsewhere."
On the data front, S&P Case-Shiller home price indices are at 1400 GMT, while consumer confidence for January is at 1500 GMT. Also, the Fed kicks off its two-day policy meeting on Tuesday.