Wall Street to start higher as traders await Powell speech

US markets are expected to open cautiously higher after a reasonable start in Europe, helped by the prospect of President Biden’s stimulus package and hopes of an economic bounce-back now the vaccination programme is picking up pace.

The Dow Jones Industrial Average is predicted to open around 87 points higher, while the S&P 500 is due to start 14 points better and the Nasdaq is predicted to rise 41 points.

Investors will be looking at a speech by Federal Reserve chair Jerome Powell to the economic club of New York, while a number of big companies are reporting. The Coca-Cola Company has done slightly better than analyst expectations, with fourth quarter earnings edging up from $1.91bn to $2.02bn excluding special items. Net revenues declined by 5% for the quarter and 11% for the full year. James Quincey, chairman and chief executive, said: “The progress we made in 2020, including the actions taken to accelerate the transformation of our company, gives us confidence in returning to growth in the year ahead. While near term uncertainty remains, we are well-positioned to emerge stronger from the crisis.”

The company is cutting back its drink’s portfolio by about 50% to focus on its more mainstream brands.

Later Uber reports full year figures, with its shares up around 7% pre-market. Michael Hewson at CMC Markets UK said: “Even without the pandemic Uber had already been haemorrhaging cash, before the economic lockdowns hit its cash flow even further. The ride hailing part of the business makes up the lion’s share of overall revenue, while its delivery or “eats” business is the small relation. In Q2 the company posted a net loss of $1.8bn as taxi bookings declined 73%, while delivery bookings saw a 113% rise. In Q3 these losses shrank but were still over $1bn, while revenues also came in short at $3.13bn. The company reiterated its guidance that it expects to be profitable on an EBITDA basis by the end of 2021, however, given recent events it may well have to rethink that.”

On Tuesday Twitter unveiled better than expected advertising revenues in the fourth quarter, up 28%, and although it warned about slowing user growth this year its shares are expected to open around 5% higher.

Three things to watch for on Wednesday:

• Other major companies making an appearance in the earnings diary include data centre operator Equinix Inc (NASDAQ:EQIX), petroleum refiner Equinor ASA (NYSE:EQNR) and online real estate marketplace Zillow Group Inc (NASDAQ:ZG)
• Shares in stock exchange operators Nasdaq Inc (NASDAQ:NDAQ) and NYSE owner Intercontinental Exchange Inc (NYSE:ICE) may also be in focus after the two firms filed lawsuits against the SEC to block plans to overhaul public data feeds of stock prices, which the companies said could jeopardise their revenues
• There may also be some fireworks in the political arena as the impeachment trial of former president Donald Trump continues in the Senate

Story by ProactiveInvestors