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Stocks sell-off; Saudi conference; Harley-Davidson earnings

Posted at 3:12 AM, Oct 23, 2018
and last updated 2018-10-23 05:12:33-04

1. Markets drop: US futures were pointing lower on Tuesday as investors around the world sold stocks.

European stocks dropped in early trade, with several major indexes touching their lowest levels in over a year. Asian markets ended the session sharply lower after posting strong gains on Monday.

“A 2.5% fall in the Shanghai Composite index today, after two days of strong gains, rather sums markets up,” said Societe Generale analyst Kit Juckes. “The tide … is going out, but there are days when the wind, and the mood, go in the opposite direction.”

The downturn started late Monday. The Dow Jones industrial average closed down 0.5% and the S&P 500 dropped 0.4%. The Nasdaq bucked the trend to gain 0.3%.

2. Saudi conference: Saudi Arabia’s big investment conference started Tuesday without some of its VIPs.

Dozens of top business leaders from around the world have pulled out of the Future Investment Initiative over the killing of dissident journalist Jamal Khashoggi at the Saudi consulate in Istanbul earlier this month.

The exodus of executives — including the CEOs of JPMorgan Chase (JPM), Uber and Siemens (SIEGY) — has taken the shine off the showcase event hosted by Saudi Crown Prince Mohammed bin Salman.

Saudi Arabia has rejected suggestions that it may restrict global oil supply in response to international pressure over Khashoggi’s death. US oil futures were trading 1% lower at $68.70 per barrel on Tuesday.

3. Tariff trouble: Harley-Davidson (HOG) and Caterpillar (CAT) will report results before the opening bell.

Both companies have been hurt by President Donald Trump’s trade policy. Harley-Davidson was hit by EU tariffs in retaliation for US steel and aluminum taxes and its shares are down 18.3% so far this year.

Caterpillar has suffered even more, as investors worry about how the heavy equipment maker will cope with the tariffs. Its stock is down almost 24% since January.

4. Earnings and economics: 3M (MMM), JetBlue Airways (JBLU), Lockheed Martin (LMT), McDonald’s (MCD), Verizon (VZ) and Xerox (XRX) are also set to release earnings before the open.

Capital One (COF), iRobot (IRBT), Noodles & Co (NDLS), Six Flags (SIX) and Texas Instruments (TXN) will follow after the close.

Johnson & Johnson (JNJ) offered to buy Japanese cosmetics company Ci:z Holdings on Tuesday. It is offering 230 billion yen ($2.1 billion) for the roughly 80% of Ci:z Holdings it doesn’t already own.

Bank of England Governor Mark Carney will speak at a conference in Toronto at 11:20 a.m. ET. Investors will be watching for comments on Brexit.

5. Coming this week:
Tuesday — 3M (MMM), JetBlue (JBLU), Six Flags (SIX), McDonald’s (MCD), Sprint (S), Las Vegas Sands (LVS), Caterpillar (CAT), CA Technologies (CA), Lockheed Martin (LMT), Verizon (VZ), Harley-Davidson (HOG) earnings
Wednesday — Aflac (AFL), Build-A-Bear (BBW), Allegiant Travel (ALGT), AT&T (T), Baidu (BIDU), Boeing (BA), Callaway Golf (ELY), Xerox (XRX), Visa (V), Ford (F), Microsoft (MSFT), SiriusXM (SIRI), Whirlpool (WHR), Wynn (WYNN) earnings
Thursday — Alphabet (GOOGL), Amazon (AMZN), Altria (MO), Ally Financial (ALLY), American Airlines (AAL), Alaska Air Group (ALK), Southwest (LUV), AK Steel (AKS), Spirit (SAVE), Dunkin’ Brands (DNKN), Boyd Gaming (BYD), Stanley Black & Decker (SWK), Sherwin-Williams (SHW), Merck & Co. (MRK), Hershey (HSY), GrubHub (GRUB), Snap Inc. (SNAP) earnings
Friday — Colgate-Palmovie (C) and Charter Communications (CHTR) earnings