Yuan watch; Retail earnings; BP meeting

The yuan continued to fall Tuesday despite the United States moving to temporarily ease restrictions on Huawei, one of China's top tech firms. The Trump administration said Huawei could continue to do business with US suppliers for 90 days in order to maintain existing phones and networks.

But selling pressure remains. In trading outside China, one US dollar now buys roughly 6.94 yuan. In mainland China, where the yuan fluctuates around a reference rate set daily by the People's Bank of China, the currency stands at 6.91 to the dollar.

To many market watchers, it's a question of when, and not if, the yuan weakens below the 7 level in offshore trading, Jameel Ahmad, global head of currency strategy at FXTM, said in a note on Tuesday.

At that point, Beijing could either let its currency weaken further, helping Chinese exports to the United States but possibly angering the US government, or move to prop up the yuan. But such interference could also garner a negative political reaction, and also carries risks for the Chinese economy.

2. Retail earnings: Earnings from US retailers kick into high gear Tuesday. Home Depot (HD), JCPenney (JCP), Kohl's (KSS) and TJX (TJX) will release earnings before US markets open. Nordstrom (JWN) and Urban Outfitters (URBN) will publish results after the close.

Walmart (WMT) set a high bar for stores last week. America's largest retailer said sales last quarter at stores open at least a year increased 3.4% from a year earlier. Its online sales growth clocked in at 37% last quarter.

But Walmart warned it will raise prices on some products as a result of the Trump administration's tariffs on Chinese goods. "Increased tariffs will lead to increased prices, we believe, for our customers," Walmart's chief financial officer said.

Nike (NKE), Adidas (ADDDF) and other sneaker brands said in a letter to President Donald Trump on Monday that proposed tariffs on imported shoes from China would be "catastrophic" for American consumers.

Expect analysts to press the retailers on how they plan to deal with tariffs and their exposure to China.

3. Global market rundown: Markets appear in a holding pattern as uncertainty over trade lingers.

US stock futures on Tuesday point to modest gains. The Dow is set to rise about 80 points, or 0.3%, when US markets open. The Nasdaq is poised to jump 0.6%, and the S&P 500 could climb 0.4%.

European markets opened in the green, with Britain's FTSE 100 index adding 0.6% and Germany's DAX index rising 0.7% higher.

Those increases follow a mixed trading session for stocks in Asia. Hong Kong's Hang Seng index fell 0.5%, while the Shanghai Composite index swung the other way and rose 1.2%. Japan's Nikkei shed about 0.1%.

The Dow closed down 0.3% on Monday. The S&P 500 fell 0.7%, and the Nasdaq lost 1.5%.

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4. BP annual meeting: Climate change is high on the agenda at BP's annual shareholder meeting, which takes place in Aberdeen, Scotland on Tuesday.

The company said it would support a resolution that calls on BP to set emissions targets aligned with the 2015 Paris Agreement. But it advised investors to vote against a more radical proposal, which asks the company to count emissions from the oil it sells toward the targets. Activists say the corporate targets are meaningless without that measure.

5. Coming this week:
Tuesday — US existing home sales; BP annual meeting; Kohl's, Home Depot, Nordstrom, JCPenney, Urban Outfitters and TJX earnings
Wednesday — Fed minutes; Amazon annual meeting; Target, Lowe's (LOW) and L Brands (LB) earnings
Thursday — Indian election results; Deutsche Bank annual meeting; US new home sales; Best Buy (BBY), Ross Stores (ROST) and HP earnings
Friday — US durable goods orders; Foot Locker (FL) earnings

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