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US pre-open: Stocks set slide as Wall Street monitors Brexit headlines

By Iain Gilbert

Date: Wednesday 16 Oct 2019

US pre-open: Stocks set slide as Wall Street monitors Brexit headlines

(Sharecast News) - US futures had stocks opening lower on Wednesday as investors kept a keen eye on Brexit negotiations in Europe and awaited more earnings from some of the nation's biggest firms.
As of 1230 BST, Dow futures were down 0.20%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.21% and 0.23% weaker, respectively.

The Dow closed 237.44 points higher on Tuesday as earnings from some of America's major banks began to roll in.

However, stocks slipped slightly ahead of the bell with market participants closely monitoring the latest Brexit developments as officials and diplomats said differences over the terms of Britain's withdrawal from the European Union had narrowed significantly.

The news boosted hopes that Prime Minister Boris Johnson will be able to come to an agreement with EU heads at a key summit in Brussels on Thursday. Sterling initially jumped above $1.28 on the news, a level not seen since late May, but eventually went on to pare gains as uncertainties remained.

Oanda's Craig Elam said: "Britain seems they are getting closer to a Brexit deal with the EU, but it will probably be highly unlikely for enough progress to be made before the EU summit on Thursday.

"The EU summit is a key deadline that could very well lead to Johnson abandoning his promise of hard Brexit and conceding to an extension of Article 50. Traders will need to decide before markets close on Friday if they want to hold a position over the weekend."

Elsewhere, China's Foreign Ministry said it would take countermeasures against the US in response to a bill that was said to favour Hong Kong protesters.

On the data front, mortgage interest rates rose to 3.92% from 3.90% last week, but applications for loans to purchase a home fell.

As a result, the total volume of mortgage applications was basically flat - rising just 0.5% for the week, according to the Mortgage Bankers Association.

Retail sales for September were set for release at 1330 BST, while business inventories for August and October's NAHB housing market index will both be published at 1500 BST.

In Fed speak, Charles Evans and Lael Brainard will both make speeches throughout the course of the day.

In corporate news, Bank of America, US Bancorp, IBM, Netflix and CSX earnings were all scheduled for release on Wednesday.

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