US pre-open: Stocks seen weaker ahead of earnings
US futures pointed to a weaker open on Wall Street on Tuesday as investors eyed results from the likes of Bank of America and Goldman Sachs and kept an eye on developments between the US and North Korea.
At 1130 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all down 0.3%.
TopTradr analyst Tony Cross said: “Volatility continues to prevail in terms of US equity indices with the S&P having already recovered yesterday’s losses. The big potential drivers here again remain those expected policy announcements from the Trump administration, including the idea that we may see a tax holiday to encourage US companies repatriating cash.
“If this progresses then the resulting slew of M&A activity alone would likely be sufficient to give equities another shot in the arm, although underlying P/E ratios would be left looking even more toppy. The sell-off has to come at some point – this very much remains a question of when, not if.”
Meanwhile, across the pond, UK Prime Minister Theresa May announced plans to call a snap general election on 8 June.
May, who had previously said she would not seek an early election, argued that a general election was needed to strengthen Britain’s Brexit negotiations. May would need two-thirds of MPS in the Commons to vote for an early election, and Labour leader Jeremy Corbyn has already suggested that he would back such a move.
The dollar fell against the pound, which rose on news of the election. It was down 0.1% to 0.7950. The greenback was also weighed by weak inflation data released in the US on Good Friday and nervousness ahead of a meeting between US Vice President Mike Pence and Japanese Prime Minister Shinzo Abe later on Tuesday.
In comments to the Financial Times, US Treasury Secretary Steven Mnuchin said dollar strength is good over long periods of time. He agreed with Trump's view that strength in the greenback in the short term was hurting exports, but said this strength was a positive over the longer term.
On the geopolitical front, market participants will continue to eye any developments between the US and North Korea, after an attempted missile launch by North Korea on Sunday failed.
In corporate news, UnitedHealth shares rose in pre-market trade after it lifted its 2017 revenue guidance.
United Continental Holdings was up in pre-market trade after it reported better-than-expected adjusted earnings late on Monday.
Results were also due from Johnson & Johnson, Harley-Davidson, Charles Schwab, Bank of America and Goldman Sachs ahead of the opening bell.
Post Holdings was likely to be in focus after announcing that it is buying UK breakfast brand Weetabix Food Co for £1.4bn.
On the macroeconomic calendar, housing starts and building permits are at 1330 BST.