With no major catalysts and having made some big moves late last week; US markets rolled over yesterday heavy with expectation over the upcoming earnings season. Tentativeness looks to continue at today’s open with KFC owner Yum! Brands Inc (NYSE:YUM) reporting today before Fed speakers later.
Futures suggest the Dow Jones will open 60 points lower at 16,931 with the S&P 500 expected to open 7 points lower at 1,957 and the NASDAQ Composite16 points lower at 4,000.
Attention has shifted to earnings in the United States but before significant numbers of reports have been seen, markets will still be subject to economic weakness in Europe, instability in China and the increasingly worrying outbreak of the Ebola virus in the US and now Europe.
Yum! Brands, the owner of restaurant franchises KFC, Pizza Hut and Taco Bell reports before the open and is expected to earn 89c per share up from 85c for the same quarter last year on revenue of $3.48bn. These expectations have significantly dropped from $1.08 since the last earnings were reported after the company missed estimates and warned of a sharp slowdown in sales in China. The price has dropped sharply from above $80 to below $70 and a miss today could see shares back at $60 last seen in February 2013.
Apple Inc (NASDAQ:AAPL) could be in play in today’s trading after Korean rival Samsung Electronics Co (LONDON:0593xq) released a statement predicting a large drop in quarterly profit. A small rise in Galaxy smartphone sales was not enough to offset increased marketing and lowered selling prices to fend off competition from Chinese rivals Xiaomi and Lenovo Group (HK:0992) as well as the Apple iPhone 6.
Apple has been a contributor to Samsung’s demise nonetheless the increased competition in the maturing smartphone market will have to someday be a drag on iPhone sales which is Apple’s biggest money-earner.
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