US OPEN: Amazon set to surge at session launch

• US futures point to a lower opening

• US2000 eyes a break below 1640 pts mark

• Amazon (AMZN.US) surges in premarket trade as earnings beat expectations

US indices managed to recover and finished yesterday’s session higher. However, futures point to another lower opening today. Will Wall Street recover in a similar fashion as yesterday? We will see but earnings reports released recently, especially Amazon’s report, fuelled some big moves in pre-session trade.

Small-cap index Russell 2000 (US2000) failed to recover yesterday and closed 0.25% lower. The index finished trading within a support zone ranging between 1640 and 1650 pts. Should the index break lower, declines may not stop until the next major support (1590-1600 pts zone). Russell 2000 is said to be a good barometer of the US economy as companies from the index generate bigger share of revenues at home. Source: xStation5

Exxon (XOM.US) slightly missed Q4 earnings estimate by reporting EPS of $0.41. However, earnings before one-offs stood at $1.33 as the US oil supermajor booked $3.7 billion gain on divestments in Norway. Production stood at 4,018 mboe/d in the final quarter of 2019. Downstream segment can be seen as a top laggard as it generated earnings of $898 million, 67% YoY lower.

Caterpillar (CAT.US) reported Q4 EPS of $2.63, above market consensus of $2.37. Revenue of $13.144 billion came in line with market estimates. Machiner, Energy & Transportation, company’s biggest segment, generated revenue of $12.39 billion (exp. $12.94 billion). The company said that it has improved lead times and that it remains prepared to respond quickly to changes in consumer demand. Caterpillar expects 2020 EPS to fall in the $8.50-10.00 range.

Caterpillar (CAT.US) slumped recently as the coronavirus outbreak dented outlook for global growth. The stock halted decline at the lower limit of the Overbalance structure that coincides with the 200-session moving average (purple line). The company is trading little change in pre-session trade therefore this mix could come into play during today’s session as well. Source: xStation5

Amazon (IBM.US) reported Q4 EPS of $6.47, much higher than expected $4.03. Revenue jumped to $87.437 billion (+20.8% YoY). The company said that it has 150 million subscribers in its Prime programme, marking a 50% increase against 2017. The US online retailer is trading 11% higher in pre-session trade and is set to top $1 trillion market capitalization at the open.

Ginni Rometty, CEO of IBM (IBM.US), announced that she will be stepping down from the post after 8 years at the job. She will be succeeded by current head of IBM’s cloud computing business Arvind Krishna.

According to the Bloomberg report, Marathon Petroleum (MPC.US) is exploring the sale of its gasoline station division - Speedway. Speedway has around 4 thousand locations in the United States. The division could be worth between $15 and $18 billion. However, it is said that the company may proceed with a spin-off of the division instead of sale as no final decision has been made yet.

Amazon (AMZN.US) is set to open with a major bullish price gap today. Pre-session trading points to opening around $2075 - the highest level on the record. Given how big the price gap is set to be, traders should keep in mind that so selling may occur after session launch. In such a scenario, the zone ranging around $2030 (previous ATH area) could be the first support to watch. Source: xStation5