Markets Shake Off Trump Legal Drama

August 22, 2018

New York (Aug 22)  U.S. stock futures were lower ahead of two days of trade talks between the U.S. and China and as investors digested the latest legal fallout surrounding President Donald Trump.

U.S. futures are under pressure as markets are preparing to enter the longest-ever bull market. Dow Jones Industrial Average  mini futures tied to September contracts were down 0.15% and S&P 500 mini futures were down 0.17%.

Stocks backed off their highs but still managed to close higher on Tuesday, Aug. 21, after the S&P 500  traded at a record intraday high earlier in the session. The Dow Jones rose 64 points, or 0.25%, to 25,822, the S&P 500 rose 0.2% to 2863 after earlier setting an intraday record high of 2,873.23. The Nasdaq  rose 0.5%.

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Target Corp. (TGT)  shares popped in premarket trading after it reported better-than-expected second quarter sales. The retailer reported earning of $1.47 per share, compared with analysts expectations of $1.40 a share, according to Thomson Reuters consensus data. The company also expects higher full-year comparable sales and EPS.

Lowe's Companies Inc. (LOW) saw shares fall 2.26% in the premarket after it missed estimates for quarterly same-store sales. Sales at stores open at least a year rose 5.2%, below the average analyst estimate of a 5.34% increase, according to Thomson Reuters data.

European markets were mixed Tuesday, with the Stoxx 600 down 0.0.% and Germany's Dax fell 0.02%, while the FTSE 100 gained 0.18% and France's Cac 40 was up 0.17%.

China and the U.S. return to trade talks on Wednesday amid low expectations that the mid-level talks will yield any progress.

The Federal Reserve on Wednesday will release the minutes of the Federal Open Market Committee's July 31 to Aug. 1 meeting ahead of Chairman Jerome Powell's Friday speech in Jackson Hole.

The U.S. dollar index, which measures the greenback against a basket of currencies, was flat at 95.253, having lost 1.44% since Aug. 16.

Trump's former personal attorney on Tuesday pleaded guilty to criminal charges brought by federal prosecutors. Cohen pled guilty to eight counts, all felonies, pleading guilty to two campaign finance violations, five counts of tax evasion and one count of making a false statement to a bank.

Meanwhile, also on Tuesday Paul Manafort, former chairman of Donald Trump's presidential campaign, was found guilty on eight counts of bank and tax fraud.

Asian markets shrugged off the highs of U.S. stocks. Japan's Nikkei gained 0.64% and the Topix was up 0.77%. Hong Kong's Hang Seng gained 0.6% and mainland China's SSE Composite Index lost 0.7%.


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