Global stocks traded mostly lower ahead of Thursday’s open, pointing to a third day of declines, as investors reacted to weaker-than-expected earnings and repercussions of a prolonged US-China trade dispute.
Shares of Wall Street’s mega blue-chip stock, Netflix (NFLX), are set for their biggest decline in at least two years this morning, following a surprise decline in the company’s global subscriber figures, which CEO, Reed Hastings, contributed to a membership price hike, a less-than-stellar line-up of original content and heightened competition in the online-entertainment-space - results which have lowered the bar of this season’s FAANG stock line-up.
Also weighing on risk asset prices comes an overnight nearly -2% sell-off of Japan's Nikkei Exchange, after data from the world's third largest economy showed a larger-than-expected slump in June exports, which fell for the seventh month in a row.
A benchmark survey of Japanese manufacturing and business conditions also slumped to its lowest level in three years; the collective readings have suggested a troubling slowdown in the broader Asia region, as it struggles with the ripple-effects from an ongoing US-China trade dispute.
These worries have washed ashore, with stateside declines looking to extend upon yesterday’s losses. Wall Street finished Wednesday's trading in red territory following more subdued trading as investors digested a fresh batch of earnings, as well as Donald Trump’s damped hopes of a swift resolution to trade talks with China.
Wall Street’s S&P 500 shed -0.66% of its value, slipping from record highs and notching its steepest one-day drop in three weeks; led lower by declines in Industrial (-2.14%) and Energy (-1.14%) stocks.
Ahead, in today’s economic calendar, Thursday includes; Weekly Jobless Claims, as well as Philly Fed Employment and Manufacturing figures for July at 8:30am EST.
In corporate news; Microsoft (MSFT), UnitedHealth (UNH), Morgan Stanley (MS), BB&T (BBT), Crowdstrike (CRWD), Skyworks Solutions (SWKS) and Philip Morris (PM) are amongst the major companies scheduled to report today.
TODAY'S TOP HEADLINES
China & Trade: Trump and Xi Are Struggling to Find Path Forward in Trade Talks. (Bloomberg)
Slow progress on key initial demands from Presidents Donald Trump and Xi Jinping is raising doubts about whether the US and China will actually return to the negotiating table to overcome their much deeper differences.
Today's Economical Announcements.
08:30AM - ★☆☆ - Weekly Jobless Claims (Previous: 209,000)
08:30AM - ★★☆ - Philly Fed Employment (Jul) (Previous: 15.4)
08:30AM - ★★★ - Philly Fed Manufacturing (Jul) (Previous: 0.3)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Netflix (NFLX): [EARNINGS] Reported quarterly profit of 60 cents per share, 4 cents a share above estimates. Revenue beat forecasts as well. Netflix lost U.S. video streaming customers for the first time in eight years, however, and also missed targets for overseas subscriber additions.
Ebay (EBAY): [EARNINGS] Reported adjusted quarterly earnings of 68 cents per share, 6 cents a share above estimates. Revenue came in just above Wall Street forecasts. The online marketplace also raised its profit outlook.
Philip Morris International (PM): [EARNINGS] Earned an adjusted $1.46 per share for its latest quarter, exceeding the consensus estimate of $1.32 a share. Revenue also beat forecasts and the company raised its full-year forecast.
Apple (AAPL): [UPGRADE] Upgraded to “outperform” from “market perform” at Raymond James, which pointed to confidence in the upcoming 5G iPhone cycle.
Wayfair (W): [NEWS] Wayfair announced that Chief Operating Officer James Savarese and Chief Technical Officer John Mulike will retire from the online furniture retailer.
Advanced Micro Devices (AMD): [DOWNGRADE] Downgraded to “neutral” from “buy” at Mizuho Securities in a valuation call, with the firm noting an 80% year-to-date runup in the chip maker’s shares.
Kinder Morgan (KMI): [EARNINGS] Reported earnings of 22 cents per share for the second quarter, 2 cents a share below forecast. The energy pipeline operator’s revenue also came in below Wall Street forecasts.
Morgan Stanley (MS): [EARNINGS] Reported quarterly profit of $1.23 per share, 9 cents a share above estimates. Revenue also beat analysts’ forecasts. CEO James Gorman said the quarter was solid across all of the company’s businesses.
UnitedHealth (UNH): [EARNINGS] Reported adjusted quarterly profit of $3.60 per share, 15 cents a share above estimates. Revenue topped forecasts as well, helped by growth in health plan membership. The company also raised its full-year forecast.
IBM (IBM): [EARNINGS] Beat estimates by 10 cents a share, with quarterly earnings of $3.17 per share. Revenue was in line with forecasts. IBM’s bottom line was boosted by growth in its cloud business, but its revenue declined for the fourth straight quarter.
SunTrust Banks (STI): [EARNINGS] Topped estimates by 3 cents a share, with quarterly profit of $1.48 per share. Revenue also came in above forecasts. SunTrust’s profit fell from a year ago on higher non-interest expenses and a larger provision for credit losses. SunTrust is in the process of merging with BB&T, which also reported this morning and also beat estimates on the top and bottom lines.
Honeywell (HON): [EARNINGS] Beat estimates by 2 cents a share, with quarterly earnings of $2.10 per share. Revenue was below forecasts. Honeywell’s bottom line was helped by higher demand for aircraft parts, and the company raised its full-year earnings forecast based on organic sales growth trends.
GAINERS: SGEN, MTSI, CTAS, HSY, CARA
DECLINERS: SCPL, CRC, ZYNE, CSX, TXT, NSC, UNP
AssetMark Financial (AMK) (Price: 22) (Est. Vol: $270.0M)
Conyers Park (CPAA.U) (Price: 10) (Est. Vol: $400.0M)
Fulcrum Therapeutics (FULC) (Price: 16) (Est. Vol: $72.0M)
Genmab (GMAB) (Price: 17.75) (Est. Vol: $505.9M)
Mirum Pharmaceuticals (MIRM) (Price: 15) (Est. Vol: $75.0M)
Oaktree Acquisition (OAC.U) (Price: 10) (Est. Vol: $175.0M)
Owl Rock Capital (ORCC) (Price: 15.30) (Est. Vol: $153.0M)
Phreesia (PHR) (Price: 18) (Est. Vol: $167.2M)
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