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© Reuters. Traders work on the floor of the NYSE in New York
By Sruthi Shankar
(Reuters) – Wall Street is expected to open down Monday after weak results and forecasts for the full year caterpillar (NYSE 🙂 has set a mediocre rating for a results-rich week that also includes a Federal Reserve meeting and trade talks between the United States and China.
Shares of the world's largest heavy equipment maker fell 6.2% in pre-market trading, quarterly earnings and outlook for the year were below badysts' estimates, as the company suffered from a slowdown construction activities in China.
The other Boeing components (NYSE 🙂 Co fell 1.3% and 3M (NYSE 🙂 Co slid 1.1%.
"With Caterpillar's fault on China, investors are expecting to see more companies doing the same during the week," said Peter Cardillo, chief economist at Spartan Capital Securities in New York. .
"Until now, the quality of the results is not so negative, but investors are clearly focusing on what a company like Caterpillar would say."
Adding to the difficulties, Chinese data showed that industrial profits declined in the second month of December, due to slowing prices and weak factory activity in the context of a protracted trade war between the two countries. United States and China.
As the signs of a slowdown in the world's second largest economy become increasingly bleak, investors are placing their hopes in a trade compromise between Washington and Beijing. Chinese Vice Premier Liu He will travel to the United States on Wednesday and Thursday for the next round of trade talks.
Despite the hiccups, US stocks have been steadily increasing since the beginning of 2019. The increase is 13.6% over the Christmas low and the monthly performance is the best since March 2016.
Fourth-quarter gains far outstripped Wall Street forecasts. According to Refinitiv's IBES data, 72.3% of the 112 components of the S & P 500 reported on Friday were above earnings estimates.
As profits grow rapidly, investors are waiting for reports from Apple Inc. (NASDAQ :), which has already reduced its sales prospects by accusing anemic Chinese demand for iPhone, as well as Facebook Inc (NASDAQ :), Microsoft Corp (NASDAQ 🙂 and Amazon.com Inc. (NASDAQ :).
The downward trend kept the stocks of tech companies in the red early trading, while chip makers more exposed to China were also trading. Micron Technology Inc. (NASDAQ 🙂 and Nvidia Corp have fallen about 1% each.
Washington's decision to end the government's 35-day shutdown strengthened Wall Street on Friday. However, the concern over a new closure came when President Donald Trump expressed skepticism over the weekend that US lawmakers could reach an agreement on border security that would be acceptable to him.
At 8:41, ET, down 200 points, or 0.81%. were down 16.25 points, or 0.61% and down 45 points, or 0.66%.
Fed decision-makers meet from January 29th to 30th. President Jerome Powell should recognize the growing risks to the US economy as the global dynamic falters.
The US central bank has said it will likely increase its borrowing costs twice in 2019, but policymakers are no longer in a hurry. Some expect a likely pause in terms of "months" that may be needed for the risks to go away.
Oil prices fell nearly 2% after US companies added drilling rigs for the first time this year, a sign that crude oil production could rise further. Actions of Chevron Corp. (NYSE 🙂 fell 1.1% and Chesapeake Energy Corp. (NYSE 🙂 fell 2.5%.
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