Phase one trade deal signing ceremony in focus
Wall Street was set to open slightly lower on Wednesday, with investors staying on the sidelines ahead of the signing of the preliminary trade agreement between the United States and China. The signing ceremony will take place at the White House later today.
The Trump administration says the Chinese government has agreed to buy billions in U.S. farm products and stop its practice of forced tech transfer for American firms that do business in China. In exchange, the U.S. is expected to remove or roll back many of the tariffs imposed on goods imported from China.
However, Treasury Secretary Steven Mnuchin said on Tuesday that the tariffs will remain in place until phase two of the agreement is ready.
“These tariffs will stay in place until there is a Phase 2,” Mnuchin told reporters. “If the president gets a Phase 2 in place quickly, he’ll consider releasing tariffs as part of Phase 2.”
Mnuchin’s comments pressured U.S. stock futures early Wednesday, with the blue-chip Dow futures dropping 50.5 points, or 0.17% to 28,883.5 as of 4:20 a.m. ET. The S&P 500 futures were down 4.62 points, or 0.14% to 3,283.38 while the tech-heavy Nasdaq 100 futures declined 13.88 points, or 0.15% to 9,048.62.
Crude futures slump
Crude futures drifted lower Wednesday, ahead of the signing of the U.S.-China phase one trade pact. Traders are worried that the interim trade deal may not have a huge impact on demand for oil, particularly after Mnuchin said the U.S. will not scrap tariffs on Chinese goods until the two countries complete a phase two of the trade deal.
By 4:20 a.m. ET, U.S. West Texas Intermediate crude futures were down $0.26, or around 0.45%, at $57.97 per barrel. International Brent crude oil futures were at $71.06 per barrel, down $0.27, or about 0.7%.
Bank of America and Goldman Sachs lead Wednesday’s earnings calendar
Bank of America (NYSE: BAC) is expected to report fourth-quarter earnings of $0.68 per share on revenue of $22.35 billion ahead of the bell. The stock was up 0.42% in premarket trade.
Goldman Sachs (NYSE: GS) is projected to have earned $5.46 a share on $8.51 billion revenue in its fiscal 2019 fourth quarter. The stock jumped 0.44% in premarket hours.