Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Top 5 Things to Know in the Market on Wednesday

Published 10/16/2019, 06:00 PM
Updated 10/16/2019, 06:23 PM
© Reuters.

© Reuters.

Investing.com -- Bank of America (NYSE:BAC) leads a parade of more financial earnings, after JPMorgan (NYSE:JPM) stood out among a mediocre set of results from Wall Street on Tuesday. Drug wholesalers are in talks to settle opioid-related claims for $18 billion, while the hoped-for Brexit deal has hit a roadblock. Here's what you need to know in financial markets on Wednesday, 16th October

1. BofA tops the earnings bill

Earnings season continues with reports from Bank of America (NYSE:BAC) and some of the larger second-tier banks (US Bancorp (NYSE:USB), PNC Financial (NYSE:PNC), Bank of New York Mellon (NYSE:BK)) that are purer plays on the U.S. economy than their Wall Street brethren. The blue bloods reported a mixed bag on Tuesday, with only JPMorgan (NYSE:JPM) really distinguishing itself.

Abbott Labs (NYSE:ABT) will also report before the bell and has a tougher act to follow after UnitedHealth (NYSE:UNH) and J&J both posted strong numbers.

After the bell, it will be the turn of Netflix (NASDAQ:NFLX) and IBM (NYSE:IBM), while CSX (NASDAQ:CSX) and Kinder Morgan (NYSE:KMI) will update at a time when the market for their main commodity, crude oil, is taking a serious turn south.

2. Giant opioid settlement looms

Three of the biggest drug distributors at the heart of the opioid scandal - McKesson (NYSE:MCK), AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH) – are in talks to settle the various allegations against them for a total of around $18 billion, according to The Wall Street Journal.

The WSJ said the payments would be phased over 18 years. It added that Johnson & Johnson would also chip in with some additional funds after its landmark settlements last month.

If finalized, the settlement would be the first to achieve a broad resolution of the opioid lawsuits outside of bankruptcy. OxyContin maker Purdue Pharma filed for bankruptcy in its attempts to effect a settlement of between $10 and $12 billion.

3. Stocks to open lower ahead of key retail sales data:

U.S. stocks are set to open lower amid lingering doubts about the substance of the U.S.’s much-hyped “phase-1” deal to de-escalate the trade dispute with China, and reports of a sudden “roadblock” on the path to a Brexit deal (see below) between the EU and U.K. The market has the chance of a morale boost at 8:30 with the publication of retail sales data for September. Core retail sales are expected to have risen 0.2% after stagnating in August.

By 6 AM ET (1000 GMT), Dow futures were down 61 points or 0.2%, the S&P 500 futures and Nasdaq futures were down by a similar amount.

United Airlines should be due a pop after beating earnings forecasts and raising its full-year outlook by just over 4% when it reported after the bell on Tuesday. Tradeweb Markets, which IPOed earlier this year, also beat consensus but still slipped a little in after-hours trading.

4. Brexit deal hits stumbling block

The British pound and stock market vacillated as negotiators closed in on a deal to avert a disorderly Brexit on Oct. 31.

Sterling fell over half a percent against both the dollar and euro on Wednesday morning on growing signs that Prime Minister Boris Johnson will struggle to win support for his proposals from Euroskeptic backbenchers and the Northern Irish Democratic Unionist Party. Johnson needs both of those factions onboard to get a majority in Westminster for his deal.

The FTSE 250, which is more U.K.-focused than the benchmark FTSE 100 index, was the worst performing market in Europe by 6 AM, losing 1%.

5. Oil inventories due

U.S. crude oil inventories are expected to have continued a streak of (mainly seasonally-dictated) increases last week. The American Petroleum Institute will release its weekly report on oil stocks at 4:30 PM ET, a day later than usual due to the Columbus Day holiday. The government will likewise put out its weekly report on domestic oil supplies on Thursday. Analysts expect a build of 2.77 million barrels in crude stocks after a rise of 2.91 million barrels last week.

Crude prices have slumped in recent sessions amid fears for global demand. The International Monetary Fund on Tuesday cut its gross domestic product forecast for the world economy to 3% this year, the weakest since 2009, and to 3.4% next year. By 6 AM ET, U.S. crude futures were up 0.3% at $52.98 a barrel, while Brent was up 0.1% at $58.84.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.