Global stocks traded firmly higher this morning, setting up US equities for a solid advance after Beijing, capital of the world’s second largest economy, released figures of the strongest manufacturing output in China since the last eight months, further easing concerns surrounding global growth.
China’s manufacturing activity in March rose above the 50 mark, which separated growth from contraction for the first time in four months, suggesting that Beijing’s strategized $300 Billion in spending and tax cuts successfully put output declines on hold; declines of which were linked to the ongoing trade war between China and the US.
Global equities as a whole, driven mostly by Wall Street (SPY [Q1 2019]: +13.1%), are now building upon their strongest quarter since 2010, amid hopes that a move from major central banks to offer more policy support will help prop up earnings growth.
This climb over the past three months was sealed on Friday, the last day of Q1 2019, where progress in US-China trade talks and an eased rally in sovereign bonds sent indices trading higher, with the S&P 500 finishing +0.63% higher, while the Dow Jones and Nasdaq added +0.80% and +0.76% to their value, respectively.
In Monday’s economic calendar; Retail Sales data for February are set for release at 8:30am EST, followed by the closely followed ISM Manufacturing Index for March at 10am EST.
Meanwhile, in corporate news; Eastman Kodak (KODK) and Cal-Maine Foods (CALM) are amongst the major companies expected to release their financial earnings today.
TODAY’S TOP HEADLINES:
Energy & Markets: Aramco Emerges Ahead of Apple as World’s Most Profitable Company. (The WSJ)
Saudi Aramco’s net income surged nearly 50% to $111 billion last year as global oil prices rose, according to a bond prospectus issued to investors, revealing that the oil and gas firm is the most profitable company in the world.
Brexit: May under pressure to go for soft Brexit. (Reuters)
Britain’s exit from the European Union was in disarray after the implosion of Prime Minister Theresa May’s Brexit strategy left her under pressure from rival factions to leave without a deal, go for an election or forge a much softer divorce. Parliament will vote on different Brexit options on Monday and then May could try one last roll of the dice by bringing her deal back to a vote in parliament as soon as Tuesday.
ECONOMIC CALENDAR:
Today’s Economical Announcements
08:30AM – ★★★ – C. Retail Sales (MoM) (Feb) (Previous: 0.9%)
08:30AM – ★★★ – Retail Sales (MoM) (Feb) (Previous: 0.2%)
09:45AM – ★★☆ – Manufacturing PMI (Mar) (Previous: 52.5)
10:00AM – ★★☆ – Business Inventories (MoM) (Jan) (Previous: 0.6%)
10:00AM – ★★☆ – ISM Manufacturing Employ. (Mar) (Previous: 52.3)
10:00AM – ★★★ – ISM Manufacturing PMI (Mar) (Previous: 54.2)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Activision Blizzard (ATVI): [REVIEW] Wedbush added the video-game maker’s stock to its “Best Ideas” list, saying it’s positioned to deliver significant outperformance over the next two years.
Cal-Maine Foods (CALM): [EARNINGS] Reported quarterly profit of 82 cents per share, well above the consensus estimate of 43 cents a share. Revenue topped forecasts. Cal-Maine points to favorable demand trends and a strong performance by its specialty egg business.
PG&E (PCG): [NEWS] A judge may keep California utility PG&E from resuming dividend payments until it meets goals to trim trees near its power lines and reduces its role in causing California wildfires.
Intel (INTC): [NEWS] The chipmaker has laid off a “substantial” number of IT workers numbering in the “hundreds,” according to the Oregonian newspaper.
Kellogg (K): [NEWS] Kellogg is near a deal to sell its Keebler and Famous Amos brands to Italy-based Ferrero for up to $1.5 billion, according to sources who spoke to CNBC. Ferrero is the company that owns the Nutella brand and bought Nestle’s US candy business last year.
Apple (AAPL): [NEWS] Apple has hired Tesla’s head of electric powertrains, according to industry publication Electrek, sparking talk that Apple intends to produce an electric vehicle rather than merely a self-driving system.
Johnson & Johnson (JNJ): [NEWS] J&J’s baby shampoo samples were rejected by regulators in India, who said they failed quality tests. The tests indicated that the samples contained formaldehyde, but J&J said the company does not accept the results and that the products are safe.
T-Mobile US (TMUS): [NEWS] The mobile carrier detailed a departure plan for Chief Financial Officer Braxton Carter in a Securities and Exchange Commission filing. He would depart on one of three dates, whichever arrives first: the end of 2019, 20 days after the first quarterly filing of a merged T-Mobile and Sprint, or 20 days after an announcement that the proposed deal is off.
Walgreens Boots Alliance (WBA): [NEWS] Walgreens has been testing tobacco-free stores in the US, but its CEO Stefano Pessina tells The Wall Street Journal that the drugstore chain has no plans to completely abandon cigarette sales.
Walt Disney (DIS): [NEWS] Disney’s live remake of its animated classic “Dumbo” did top the weekend box office with ticket sales of $45 million, but the opening was considered weak by industry analysts. The film had a budget of $170 million.Wells Fargo (WFC): [DOWNGRADE] Downgraded to “market perform” from “outperform” at Keefe Bruyette & Woods, which said it does not believe the bank will save as much in expenses as previously thought.
MOMENTUM STOCKS:
GAINERS: EXP, KMX, CELG, WCG, SVMK
LOSERS: RH, SGH, NLSN, HOME, CDNA
TODAY’S IPOs:
None.