U.S. futures point to a pre-Thanksgiving Day bump on Wall Street after two dismal sessions to start the week. The S&P 500 futures trade 16 points, or 0.6%, above fair value.
In earnings, Deere (DE 134.34, -4.18, -3.0%) is trading lower in pre-market hours after the company missed top and bottom line expectations. Deere's worldwide sales of agriculture and turf equipment are forecast to be up about 3.0% for fiscal-year 2019, including a negative currency-translation effect of 2.0%. Retailers Foot Locker (FL 53.00, +6.91, +15.1%) and Gap (GPS 24.49, -0.17, -0.7%) both reported above-consensus bottom lines, but Gap stated it's clearly not satisfied with the performance of its Gap brand; the company lowered the top end of its fiscal 2019 earnings range.
Looking at energy, WTI crude has bounced 2.4% to $54.69/bbl after falling to its lowest level since October 2017 yesterday. The weekly API crude inventory report showed an unexpected draw of around 1.5 million barrels. The U.S. Energy Information Administration (EIA) will release its official government report for crude inventory at 10:30 AM ET.
Investors received a batch of data this morning, which included Durable Goods Orders for October and the weekly Initial and Continuing Claims report:
- Durable Goods orders for October decreased 4.4% (Briefing.com consensus -2.6%) after decreasing a revised 0.1% (from +0.8%) in September. Excluding transportation, durable goods orders increased 0.1% (Briefing.com consensus +0.4%) after a revised 0.6% decrease (from +0.1%) in September.
- The key takeaway from the report is that the headline decline was driven by a drop in aircraft orders while motor vehicle and parts orders increased modestly.
- Initial claims for the week ending November 17 increased by 3,000 from last week's revised rate of 221,000 (from 216,000) to 224,000 (Briefing.com consensus 215,000). Continuing claims for the week ending November 10 decreased by 2,000 from last week's revised level of 1.670 million (from 1.676 million) to 1.668 million.
- The key takeaway from the report is that even with the upward revision to last week's reading, claims remain not far above multi-decade lows. This week's miss is likely the result of economists basing their estimates on last week's unrevised reading.
In addition, investors will receive Existing Home Sales for October (Briefing.com consensus 5.20 million), the Conference Board's Leading Economic Index for October (Briefing.com consensus 0.1%), and the final reading of the University of Michigan Index of Consumer Sentiment for November (Briefing.com consensus 98.3) at 10:00 AM ET.
Separately, U.S. Treasuries have ticked slightly lower, pushing yields higher. The 2-yr yield and 10-yr yield are up one basis point each to 2.80% and 3.06%, respectively. Meanwhile, the U.S. Dollar Index is down 0.2% to 96.61.
Elsewhere, the Organization for Economic Cooperation and Development on Wednesday said global growth is slowing amid rising trade and financial risks. Growth forecasts for next year have been revised down for most of the world's major economies. Global GDP is now expected to expand by 3.5% in 2019, compared with the 3.7% forecast in last May's Outlook, and by 3.5% in 2020.
Overseas, Asia closed on a mixed note on Wednesday with China's Shanghai Composite ticking higher by 0.2%. Elsewhere, the major European indices trade modestly higher with UK's FTSE (+1.1%) showing relative strength.