LDN - Business

Futures slip as earnings roll in; Tesla, Apple slide

[January 16, 2024] (Reuters) - U.S. stock index futures ticked lower on Tuesday as Apple and Tesla shed 2% each, while investors looked ahead to results from Goldman Sachs and Morgan Stanley to gauge the health of capital markets and dealmaking.

Goldman Sachs dipped 0.1% and Morgan Stanley 0.7% in thin premarket trading. Their earnings follow lower profits reported by Wells Fargo, Bank of America, Citigroup and JPMorgan Chase on Friday, as lenders grapple with special charges, job cuts and souring consumer loans.

Of the 29 S&P 500 firms that have reported results as of Friday, 93.1% have beaten analysts' earnings expectations, according to LSEG data.

Wall Street finished the previous week higher as investors continue to price in a 70% chance of the U.S. Federal Reserve's first rate cut of at least 25 basis points in March - despite mixed signals from the latest inflation data and a lack of supporting voices among policymakers for a quick start to monetary policy easing.

Atlanta Fed President Raphael Bostic, a voting member this year, said on Sunday that inflation could "see-saw" if policymakers cut interest rates too soon, warning that inflation's descent towards the central bank's 2% goal was likely to slow in the months ahead, according to a report.

Markets will also parse Fed Board Governor Christopher Waller's remarks, expected at 11:00 a.m. ET, for clues on his view on the timing for easing credit conditions.

Meanwhile, UBS Global Research boosted its 2024 year-end target for the S&P 500 on Tuesday to 5,150, representing a nearly 8% upside from current levels.

The benchmark index has faced resistance in recent sessions to breach its highest intra-day level hit in January 2022.

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 9, 2024. REUTERS/Brendan McDermid/File Photo

At 5:42 a.m. ET, Dow e-minis were down 189 points, or 0.50%, S&P 500 e-minis were down 27 points, or 0.56%, and Nasdaq 100 e-minis were down 119 points, or 0.7%.

Tesla shed 2.2% after CEO Elon Musk said he would be uncomfortable growing the automaker to be a leader in artificial intelligence and robotics without having at least 25% voting control of the company.

Apple fell 1.8% after offering rare discounts on its iPhones in China on competition pressures, just days after the tech giant was overtaken by Microsoft as the world's most valuable firm.

Boeing declined 2.6% as the Federal Aviation Administration extended the grounding of Boeing 737 MAX 9 airplanes indefinitely for new safety checks, and brokerage Wells Fargo downgraded the company to "equal weight" from "overweight".

PayPal lost 2.1%. Elon Musk's X, formerly known as Twitter, received a money-transmitter license from Utah on Monday, as the company explores adding a payments feature to the social media platform.

Applied Digital added 3.9% ahead of results.

Later in the week, investors will also parse economic data like December retail sales and housing data.

(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)

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