After notching a new intraday record on Tuesday, the S&P 500 is on course for a lower open this morning as investors attempt to sort out the implications of legal proceedings involving two individuals with close ties to President Trump. The S&P 500 futures are trading eight points, or 0.3%, below fair value.
On Tuesday afternoon, President Trump's longtime lawyer, Michael Cohen, pleaded guilty to bank and tax fraud and to breaking campaign finance laws. Mr. Cohen also admitted that Mr. Trump directed him to pay two women hush money "for the principal purpose of influencing the election." Then, in a separate trial, President Trump's former campaign manager, Paul Manafort, was convicted of financial fraud.
It's unclear what, if anything, this means for President Trump, but given the individuals' close ties to the president, investors are acting with caution this morning.
Meanwhile, in Washington, mid-level officials from the U.S. and China are set to resume trade talks today following a nearly three-month stalemate. President Trump said he doesn't believe much will come from the negotiations, but the market has been optimistic nonetheless.
On a related note, Politico has reported that a "handshake" trade deal between the U.S. and Mexico could be announced on Thursday.
The FOMC minutes from the July/August meeting will be released at 2:00 PM ET. At that meeting, the Fed decided to leave interest rates unchanged and characterized the economy as strong, signaling that the central bank is still on track to raise rates two more times this year. Investors will be analyzing the minutes today for more insight.
Separately, the Existing Home Sales report for July (Briefing.com consensus 5.40 million) will be released at 10:00 AM ET.
In earnings news, retailers Target (TGT) and Urban Outfitters (URBN) are both up in pre-market trading, adding 6.7% and 5.4%, respectively, after beating top and bottom line estimates. Conversely, Lowe's (LOW) is down 0.7% after lower-than-expected guidance overshadowed upbeat earnings.