US stocks to start the week higher; Halliburton profit falls

Summary:

• US benchmarks gain on Kudlow comments 

• Small-caps move up near 1-month high

• Halliburton profits fall on weak NA drilling

After having a look lower on Friday stocks are moving higher once more so far today, with European benchmarks trading higher and US indices also in the green ahead of the North American session. The markets have received a further lift in recent minutes after some positive remarks from Kudlow on Fox Business as follows (emphasis is our own): 

• If phase 1 China talks go well, December tariffs could be taken off

• Things look pretty good as US-China trade talks continue

• Human rights are an important part of negotiations

The US500 is back around the 3000 handle but the more interesting price action lies elsewhere with the small-cap index (US2000) pushing up to its highest level since September.

Small caps have been underperforming their larger peers for much of this year with a series of lower highs seen in the US2000 since the YTD high in May whereas the US500 made its 2019 peak in July and currently trades only 1% from its record high. Source: xStation   

Earnings season is now in full swing with the most noteworthy set of results ahead of the opening bell coming from Halliburton. The company which specialises in drilling oil & gas wells reported a 32% slump in profits for the quarter, blaming weak demand in North America - its biggest market - for the poor performance. Net profit attributable to shareholders fell to $295M or $0.34/share, down from $435M or $0.50/share for the same period last year. According to Refinitiv analysts had forecast on average these earnings figures but there was a miss in revenue which dropped by 10% to $5.55B - below the consensus forecast of $5.8B.

Shares in Halliburton have been under pressure in recent years and fell to their lowest level since 2009 just a couple of months ago. The latest results will not do a lot for sparking hopes of a recovery. Source: xStation