Global equity markets were somewhat undecided ahead of today’s New York open, as investors switched their focus from monetary policy back to company earnings and the outlook for global trade, after the Federal Reserve pledged to keep interest rates unchanged for the better part of this year.
Fed Chairman, Jerome Powell, reaffirmed a “patient” approach to monetary policy, saying; he didn’t see a “strong case for moving” policy “in either direction” after the central bank kept the target range of the key Fed Funds rate unchanged at between 2.25% and 2.5%.
He did, however, allude to the “transitory” nature of conditions that was keeping inflation below the Fed’s 2% target rate – comments that were viewed by market participants as a potentially damaging case for a rate cut this year.
Stocks had been recorded trading mostly higher heading into Powell’s news conference, following earnings from Apple (AAPL: +4.91%), where the company lifted its revenue forecasts. Although, the Fed’s stop short of opening the way for a rate cut took its toll, sending shares spiralling lower, with Wall Street’s S&P 500 index having ended the session with a -0.75% decline, its worst day since March.
The Nasdaq Composite fell for a second consecutive day, down -0.32%, while the Dow Jones Industrial Average similarly traded lower, -0.62%.
In today’s economic calendar, Thursday includes; Weekly Jobless Claims and first-quarter Nonfarm Productivity data at 8:30am EST, followed by Factory Orders for March at 10:00am EST.
In today’s corporate news, earnings are expected from; Under Armour (UAA), Activision Blizzard (ATVI), Monster Beverage (MNST), Dunkin’ Brands (DNKN), Kellogg (K), CBS (CBS), United States Steel (X), PG&E (PCG), Gilead Sciences (GILD), Shake Shack (SHAK), Arista Networks (ANET) and Weight Watchers (WTW).
TODAY’S TOP HEADLINES
Economy: Here’s the one word from Jerome Powell that has people raising their eyebrows. (CNBC)
It only took one word from Fed Chair Jerome Powell on inflation to send the markets reeling, and that word was “transitory.” Traders have been speculating that recent weaker inflation readings would concern the Federal Reserve so much that it would cut interest rates later this year.
Energy & Oil: Tighter Iranian Oil Sanctions Set Stage for US-Saudi Showdown. (The WSJ)
Saudi Arabia has pledged to boost oil output if needed, as the Trump administration starts banning all Iran oil exports on Thursday.
ECONOMIC CALENDAR
Today’s Economical Announcements.
08:30AM – ★★☆ – Weekly Jobless Claims (Previous: 230,000)
08:30AM – ★★☆ – Nonfarm Productivity (QoQ) (Q1) (Previous: 1.9%)
10:00AM – ★★☆ – Factory Orders (MoM) (Mar) (Previous: -0.5%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Eventbrite (EB): [EARNINGS] Lost 13 cents per share for the first quarter, wider than the 10 cents a share loss expected by analysts. The event ticketing company’s revenue also came in below forecasts. Eventbrite also gave a weaker-than-expected forecast for the current quarter, as it deals with higher operating expenses.
Under Armour (UAA): [EARNINGS] Earned 5 cents per share for the first quarter, beating analysts’ predictions of a breakeven quarter. Revenue also beat estimates amid strong overseas demand and the company raised its full-year forecast.
Tempur Sealy (TPX): [EARNINGS] Beat estimates by 6 cents a share, with adjusted quarterly profit of 54 cents per share. Revenue beat forecasts as well, and the company raised its full-year forecast.
Wayfair (W): [EARNINGS] Lost $1.62 per share for the first quarter, 2 cents a share wider than Wall Street had anticipated. Revenue topped estimates, however.
Square (SQ): [EARNINGS] Came in 3 cents a share above estimates, with adjusted quarterly profit of 11 cents per share. Revenue was also above analysts’ forecasts.
Fitbit (FIT): [EARNINGS] Lost an adjusted 15 cents per share for its latest quarter, 7 cents a share less than analysts had predicted. Revenue came in above estimates as it sold 2.9 million of its wearable devices during the quarter.
Tesla (TSLA): [NEWS] Tesla detailed new capital raising plans that would generate about $2.3 billion in gross proceeds. That includes a 2.7 million share common stock offering, of which CEO Elon Musk may buy nearly 42,000, and $1.35 billion in convertible notes.
Dow Inc. (DOW): [EARNINGS] Reported better-than-expected revenue in its first report since being separated from DowDupont on April 1. It did not give an earnings per share number, but its core earnings total was 24% lower than in the year-earlier period, hurt by lower prices.
Dunkin’ Brands (DNKN): [EARNINGS] Reported adjusted quarterly profit of 67 cents per share, 5 cents a share above estimates. Revenue topped forecasts and Dunkin’ had a better-than-expected same store sales increase of 2.4%.
Caesars Entertainment (CZR): [EARNINGS] Lost 32 cents per share for the first quarter, wider than the 18 cents a share loss Wall Street was expecting. Revenue came in above estimates, however, and Caesars said it saw a 5.8% rise in Las Vegas market business.
Qualcomm (QCOM): [EARNINGS] Reported adjusted quarterly profit of 77 cents per share, 6 cents above estimates. Revenue also exceeded forecasts, however the company predicted lower-than-expected shipments for its cellular phone chips. Separately, Qualcomm said it would receive at least $4.5 billion as part of its recent legal settlement with Apple (AAPL).
MetLife (MET): [EARNINGS] Reported earnings of $1.48 per share for the first quarter, beating the consensus estimate of $1.27 a share, though the insurance company’s revenue was below forecasts.
3M (MMM): [NEWS] 3M is buying wound care technology company Acelity from a consortium led by funds advised by Apax Partners. The deal has an enterprise value of $6.7 billion including assumed debt, and 3M is cutting its projected share buybacks for 2019 following the announcement of the deal.
Cigna (CI): [EARNINGS] Earned an adjusted $3.90 per share for the first quarter, above the consensus estimate of $3.73 a share. Revenue also beat forecasts and Cigna also raised its full-year outlook.
Caterpillar (CAT): [DIVIDEND] Raised its quarterly dividend by 20% to $1.03 per share.
DowDupont (DWDP): [EARNINGS] Matched forecasts with adjusted earnings of 84 cents per share, while revenue fell below Wall Street forecasts. The company’s results were hit by bad weather and weakness in the auto and mobile phone markets.
Facebook (FB): [NEWS] Facebook is reportedly negotiating a settlement with the Federal Trade Commission that would involve the creation of an independent privacy oversight committee, according to Politico.
Starbucks (SBUX): [NEWS] Starbucks is recalling 263,000 coffee presses due to a laceration hazard, according to the Consumer Product Safety Commission.
Boeing (BA): [NEWS] The Federal Aviation Administration is mandating new flight control software and parts for Boeing’s 787 Dreamliner, to address various safety issues.
MOMENTUM STOCKS
GAINERS: ENPH, NUS, PCRX, AJRD, TKR, ECL, HLT, BRKS, GLDD, GDI
DECLINERS: TENB, SSNC, SBH, TAP, CLX, MC, GOOGL, TXRH, CHGG
TODAY’S IPOs
Beyond Meat (BYND) (Price: 25) (Est. Vol: $240.6M)
So-Young (SY) (Low: 11.80, High: 13.80) (Est. Vol: $166.4M)
TransMedics Group (TMDX) (Low: 15, High: 17) (Est. Vol: $72.2M)
Trevi Therapeutics (TRVI) (Low: 14, High: 16) (Est. Vol: $70M)