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Top 5 Things to Know in The Market on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, February 6:

1. Markets Digest Trump's State of the Union

In his annual State of the Union speech to a joint session of Congress on Tuesday, U.S. President Donald Trump said that illegal immigration was an urgent national crisis and reiterated his vow to build a border wall, raising the prospect of another government shutdown.

Building a wall along the border with Mexico to keep migrants from entering the country illegally was a central plank of Trump's presidential campaign, but the Republican-controlled Congress didn't approve money for it in the first half of his term, and Democrats, who now control the House, have rejected his funding request of $5.7 billion.

Trump also called on Congress to pass legislation to boost the nation's aging infrastructure, without providing details on how to go about paying for it or how much it would cost.

Commenting on the ongoing U.S.-China trade conflict, Trump said any agreement with Beijing "must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs."

Senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing next week to push for a deal on American intellectual property and avert a March 2 increase in U.S. tariffs on Chinese goods, two people familiar with the plans said.

2. U.S. Futures Point to Lower Open

U.S. stock futures pointed to a slightly lower open, as the lack of surprises in Trump's State of the Union address allowed weak economic data in Europe to grab the spotlight.

At 5:25AM ET (10:25 GMT), the blue-chip Dow futures were down 35 points, or about 0.15%, the S&P 500 futures shed 3 points, or roughly 0.15%, while the tech-heavy Nasdaq 100 futures indicated a decline of 6 points, or around 0.1%.

The moves in premarket come after Wall Street closed higher on Tuesday, with the Dow gaining more than 150 points.

Elsewhere, European stocks were lower after weak German manufacturing orders for December, with banks and automakers leading the losses.

Earlier, shares in Asia closed mostly higher in subdued trade, as several markets in the region remained closed for the Lunar New Year holiday.

3. GM Highlights Another Busy Day of Earnings

In earnings, most of the focus will fall on General Motors (NYSE:GM), which reports before the bell. The Detroit-based automaker is expected to post earnings per share of $1.24 on revenue of $36.0 billion, according to analysts polled by Investing.com.

GM raised its profit guidance for 2018 last month and said its 2019 profit would grow thanks to the resilience of two of its largest markets, the U.S. and China.

Investors will be closely watching the results to see whether its ongoing efforts to reshape itself are starting to pay off. The automaker announced a sweeping restructuring plan back in November that included layoffs, closing plants, and streamlining its vehicle lineup.

Other high-profile names releasing quarterly results today include, Eli Lilly (NYSE:LLY), Spotify (NYSE:SPOT), Take-Two Interactive (NASDAQ:TTWO), Regeneron (NASDAQ:REGN), Humana (NYSE:HUM), Boston Scientific (NYSE:BSX), Cummins (NYSE:CMI), and Trivago (NASDAQ:TRVG), which are all set to report during premarket hours.

Chipotle Mexican Grill (NYSE:CMG), GoPro (NASDAQ:GPRO), iRobot (NASDAQ:IRBT), Match Group (NASDAQ:MTCH), Zynga (NASDAQ:ZNGA), FireEye (NASDAQ:FEYE), and Fortinet (NASDAQ:FTNT) are among the major companies set to report earnings results after Wednesday's market close.

Read more: 3 Hidden Gem Tech Stocks Worth Considering Before They Report: Jesse Cohen

4. Fed Speakers on Tap

A pair of Federal Reserve officials are due to make public remarks today, as investors look for further hints into the outlook for monetary policy in the months ahead.

Fed Governor Randal Quarles will speak about bank stress testing at the Council for Economic Education, in New York at 6:05PM ET (23:05 GMT).

But most attention will fall on Fed Chair Jerome Powell, who will be speaking at a town hall meeting for teachers, in Washington DC at 7:00PM ET.

The Fed last week signaled that its three-year drive to tighten monetary policy is close to an end, due to rising headwinds to the economy.

The Fed's announcement left market expectations for an interest-rate hike this year hanging by a thread, and raised the chances of a cut in 2020, according to Investing.com's Fed Rate Monitor Tool.

On the data front, Wednesday will see U.S. trade deficit figures, productivity data and unit labor costs at 8:30 a.m. ET.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.1% at 95.92.

In the bond market, U.S. Treasury prices inched higher, pushing yields a tad lower across the curve, with the benchmark 10-year yield falling to 2.68%.

5. EIA's Weekly Oil Supply Report

In commodity markets, the U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Feb. 1 at 10:30 AM ET (15:30 GMT).

Analysts expect the EIA to report a gain of around 2.1 million barrels in crude supplies. If confirmed, it would be the third straight weekly build in domestic oil inventories.

The American Petroleum Institute (API) said on Tuesday that U.S. crude inventories increased by 2.5 million barrels last week.

U.S. West Texas Intermediate crude futures were down 61 cents, or 1.1%, at $53.05 a barrel.

International Brent crude oil futures were at $61.34 per barrel, down 64 cents, or 1%.

-- Reuters contributed to this report

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