Futures edge higher as strong earnings offset trade worries

[August 06, 2018]   By Sruthi Shankar

(Reuters) - U.S. stock futures were marginally higher on Monday as strong corporate earnings countered worries about escalating trade tensions between the United States and China.

China, last week, proposed a set of differentiated tariffs on $60 billion worth of U.S. imports, retaliating to the Trump administration's plans of 25 percent tariffs on $200 billion worth of Chinese imports.

The months-long dispute has roiled financial markets across the globe, but strong U.S. earnings have helped allay some of the concerns.

Over 400 S&P 500 companies have reported so far, and 78.6 percent have topped earnings estimates. That is well above the average of 72 percent in the past four quarters.

The S&P 500 <.SPX> ended up 0.8 percent last week, closing a five-week run of gains, its first such winning streak this year.

"If the first four weeks of earnings season are any indication, we should see the tide continue to rise, though headline risk associated with trade and tariffs continue to play a pivotal role in keeping any significant move to the upside well contained," Peter Kenney, founder of Strategic Board Solutions LLC in New York, wrote in a morning note.

With just 44 companies set to report this week and the calendar light on economic data, investors will likely focus on trade issues.

A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., July 31, 2018. REUTERS/Lucas Jackson

The S&P 500 e-minis <ESc1> were up 2.5 points by 7:11 a.m. ET. The Dow e-minis <1YMc1> were up 33 points and the Nasdaq 100 e-minis <NQc1> were up 12.75 points.

Berkshire Hathaway Inc <BRKb.N> rose 2.13 percent in premarket trading after the Warren Buffett-led conglomerate reported a 67 percent surge in quarterly operating profit.

Qualcomm <QCOM.O> and Advanced Micro Devices <AMD.O> rose about 1.5 percent each following positive brokerage recommendations.

Newell Brands <NWL.N> dropped 2.1 percent after the maker of Sharpie markers reported a fall in quarterly sales.

PepsiCo <PEP.O> dipped 0.5 percent in thin trading after the company said Chief Executive Officer Indra Nooyi would step down in October.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)

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