Futures flat ahead of speech from Yellen, Quarles

Global Stock Markets

U.S. stock index futures were flat on Tuesday as investors parse another round of earnings reports and await a speech from outgoing Federal Reserve Chair Janet Yellen. 

Her speech will come less than a week after President Donald Trump chose Fed governor Jerome Powell to replace Yellen at the end of her term in 2018. Apart from Yellen, Fed Vice Chair for Supervision Randal Quarles will take part in a discussion on financial regulation. 

This will be Quarles’ first extensive public comments since taking up the job and Wall Street will be keen to hear on the deregulation of banks from Trump’s nominee.  Investors will also keep an eye on the ongoing tax bill negotiations within the Republican party. 

House Republicans last week unveiled the first draft of a tax overhaul bill that, if enacted, would be the biggest overhaul of the U.S. tax system since the 1980s. It proposes a range of tax cuts aimed at helping businesses, including slashing the corporate rate to 20 percent from 35 percent.

U.S. stocks climbed to record highs on Monday, helped by optimism about merger activity and as investors bet that the tax bill would bolster earnings. The S&P has risen about 15 percent in 2017 on the back on strong earnings and Trump’s promises to cut taxes, increase infrastructure spending and reduce regulation. With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8 percent, compared with expectations of a 5.9 percent rise at the start of October, according to Thomson Reuters I/B/E/S. 

Shares of Valeant Pharma (VRX.N) was up 11.7 percent after its profit beat Wall Street estimates due to strength in its eye-care Bausch + Lomb business. Shares of Priceline Group (PCLN.O) were down 9.8 percent after the online travel services company gave a softer-than-expected guidance for the fourth quarter.

Weight Watchers (WTW.N) jumped 12.7 percent after the weight management company raised its profit forecast. Dow e-minis 1YMc1 were up 19 points, or 0.08 percent, with 19,792 contracts changing hands. S&P 500 e-minis ESc1 were down 0.25 points, or 0.01 percent, with 123,942 contracts traded.Nasdaq 100 e-minis NQc1 were down 1 point, or 0.02 percent, on volume of 23,858 contracts.