This article was originally published on ETFTrends.com.
U.S. markets and stock ETFs struggled to pare earlier gains on Tuesday on earnings risks while concerns over the ongoing trade dispute and diminished hopes of an aggressive interest rate cut also muted investors' optimism.
Reflecting the negative fallout of ongoing global trade risks, German chemicals giant BASF forecasted a 30% fall in its adjusted annual profit, Reuters reports.
Furthermore, RBC Capital Markets downgraded 3M Co. to “sector perform”, highlighting macro pressures from China, auto and electronics sectors.
The warnings come ahead of the seasonal earnings season that kicks off next week. According to Refinitiv IBES data, S&P 500 company profits are expected to dip 0.2% year-over-year.
“Second-quarter earnings are a very important part of the puzzle for investors right now,” Michael Geraghty, equity strategist at Cornerstone Capital Group, told Reuters. “What has been driving stocks throughout 2019 is optimism about the Federal Reserve’s policy and a trade agreement with China, among other things.”
U.S. markets pulled back from last week's record highs after strong June jobs numbers tempered expectations for an aggressive Federal Reserve interest rate hike. U.S. Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on Wednesday and provide a clearer picture of how the Fed will act.
“Stock investors are counting on a July rate cut, and obviously they’re going to be tracking anything Powell says very closely for confirmation,” Jack Ablin, founding partner and chief executive officer of Cresset Capital, told the Wall Street Journal.
Meanwhile, the U.S. and China are set to renew trade talks this week after a two-month break. White House economic adviser Larry Kudlow also added that discussions with the European Union on a trade pact were going along as well.
For more information on the markets, visit our current affairs category.
POPULAR ARTICLES AND RESOURCES FROM ETFTRENDS.COM
- SPY ETF Quote
- VOO ETF Quote
- QQQ ETF Quote
- VTI ETF Quote
- JNUG ETF Quote
- Top 34 Gold ETFs
- Top 34 Oil ETFs
- Top 57 Financials ETFs
- Fed Concerns Stoke Market Jitters As Traders Await Comments From Powell
- Consumers Are Still Thirsty For Pepsico
- Markets Rally On Anticipated Rate Cuts And Holiday
- Facebook Libra: Weighing The Pros And Cons
- As Bitcoin Surges Past $13K, Calls to Embrace Crypto Grow