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Stocks set to open slightly higher as traders digest Brexit vote and focus on bank earnings

Stocks set to open slightly higher as traders digest Brexit vote and focus on bank earnings

U.S. stock futures were slightly higher on Wednesday, following a parliamentary defeat for British Prime Minister Theresa May’s Brexit deal.

Dow futures were 76 points higher as of 2:12 a.m. ET, indicating a 26 point rise at the open, while S&P 500 and Nasdaq futures were also higher.

Traders were digesting news that the U.K. leader had lost a vote on her Brexit deal by 230 votes, which is believed to be the highest margin of defeat for any sitting government in British political history.

May told lawmakers that her Conservative government “will listen” following the vote and that a statement will be made in Parliament on January 21 where the prime minister is due to present a “plan B” for the withdrawal agreement.

U.K. opposition leader Jeremy Corbyn, who leads Britain’s Labour party, said he has tabled a motion of no confidence in the government that will be debated and voted on Wednesday. Sterling was barely changed Wednesday, trading just below the flatline versus the dollar at $1.2855.

In other political news, the partial U.S. government shutdown — the longest in history — has extended into its 26th day, as a standoff between Democrats and the Trump administration over the president’s border wall money shows no signs of being resolved any time soon.

Meanwhile, China’s central bank, the People’s Bank of China, made its biggest ever daily net cash injection via reverse repo operations, totaling $82.73 billion. The news came after comments from the Chinese state planner and Premier Li Keqiang suggested the country would inject more stimulus amid concerns of a slowdown in economic growth.

In the previous session, the Dow Jones Industrial Average closed more than 100 points higher, with tech stocks supported by a boost in Netflix’s share price after the streaming giant said it would raise prices for its monthly subscriptions in the U.S. by 13 to 18 percent. That would be Netflix’s biggest price hike since it launched its streaming platform over a decade ago.

Worries over trade weighed on Tuesday, however, after Sen. Chuck Grassley said U.S. Trade Representative Robert Lighthizer saw little progress in last week’s negotiations with China. Washington and Beijing have been engaged in a fierce battle of tariffs, with both hitting billions of dollars’ worth of each other’s imports with new duties.

U.S. officials met with their Chinese counterparts last week for discussions which Trump said were “going very well.” The two countries have agreed to a 90-day trade truce during which they will hold off on increasing tariffs in the hope that an agreement is met.

On the earnings front, financial titans including Bank of America, Goldman Sachs, BlackRock and U.S. Bancorp are all due to report their results Wednesday. Three major Wall Street banks have posted so far this week: Citigroup, J.P. Morgan and Wells Fargo. Citi and Wells Fargo both posted a beat in profits while J.P. Morgan’s results disappointed, marking its first miss in 15 quarters.

In terms of data, MBA mortgage applications are due today at 7:00 a.m. ET, December retail sales figures and import and export prices will be published at 8:30 a.m. ET, while November business inventories and the January housing market index are set to be released at 10 a.m. ET.

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