Global equities traded mixed, alongside North American pre-market index futures, as investors became hesitant to remain optimistic over the next batch of corporate earnings, following mixed results from two of Wall Street’s biggest banks, Goldman Sachs (GS) and Citigroup (C).
Aside from earnings, US investors will be looking to price signs of progress in US-China trade talks; over the weekend, Treasury Secretary Steven Mnuchin said the world’s two largest economies were moving closer to a trade agreement, although Mnuchin didn’t provide a timetable as to when negotiations might be completed.
These developments come after Friday’s session where US stocks rallied after JPMorgan (JPM: +4.69%) and Wells Fargo (WFC: -2.62%) unofficially kicked off America’s corporate earnings season with figures that topped analysts’ expectations.
The S&P advanced +0.68%, notching its third straight weekly gain (SPY, Perf Week: +0.55%), with Financials leading the broad rally, surging +1.84%, while Materials (+1.32%), Industrials (+1.32%) and Communication Services (+0.98%) also recorded respectable gains.
A sharp rally in shares of Walt Disney (DIS: +11.54), amid enthusiasm over the company’s new streaming video service, drove a +1.02% rise in the Dow Jones Industrial Average, while the tech-heavy Nasdaq Composite trailed behind, +0.43% higher.
In today’s economic calendar; the Empire State Manufacturing Survey for April is scheduled for release at 8:30am EST.
In corporate news; Goldman Sachs (GS), Citigroup (C), Charles Schwab (SCHW), M&T Bank (MTB) and J.B. Hunt (JBHT) are amongst the major companies scheduled to release their Q1 earnings today.
TODAY’S TOP HEADLINES:
Politics & Economy: Trump’s Fed Attacks Cast a Chill at Global Finance Gathering. (The WSJ)
Former Federal Reserve officials and foreign central bankers said President Trump’s combative stance toward the US central bank could over time weaken the institution and its role in the global economy.
ECONOMIC CALENDAR:
Today’s Economical Announcements.
08:30AM – ★★☆ – NY Empire State Manuf. (Apr) (Previous: 3.70)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks.
Goldman Sachs (GS): [EARNINGS] Reported quarterly profit of $5.71 per share, beating the consensus estimate of $4.89. Revenue fell short of forecasts. Goldman also increased its quarterly dividend to 85 cents per share from 80 cents a share.
Citigroup (C): [EARNINGS] Reported mixed first-quarter results of $1.87 per share, $1.80 expected, with its earnings topping expectations while its overall revenue missed.
Clovis Oncology (CLVS): [NEWS] Clovis is discontinuing trials for a drug that targets bladder cancer, after a review of data showed that the drug may not provide a meaningful clinical benefit.
Alliance Data (ADS): [NEWS] The company’s Epsilon unit will be bought by French advertising giant Publicis for $4.4 billion, in a move by Publicis to expand its North American presence.
Waste Management (WM): [BUYOUT] Waste Management is buying smaller rival Advanced Disposal Services for $3 billion or $33.15 per share in cash.
Wells Fargo (WFC): [DOWNGRADE] Downgraded to “neutral” from “buy” at Goldman Sachs and removed from the “Conviction Buy” list. Goldman questions the bank’s ability to meet near-term and long-term financial targets.
Levi Strauss (LEVI): [RATING] Rated “overweight” in new coverage at J.P. Morgan Securities and “outperform” at Telsey. J.P. Morgan said the company has a mature brand multiyear growth driver in place, while Telsey notes a “position of strength” as Levi Strauss returns to the public markets.
CVS Health (CVS): [DOWNGRADE] Oppenheimer downgraded CVS to “perform” from “outperform,” citing near-term legacy business challenges and its opinion that the execution of the company’s strategy is more of a longer-term opportunity for investors.
Catalent (CTLT): [BUYOUT] Announced a deal to buy closely held Paragon Bioservices for $1.2 billion in cash.
Best Buy (BBY): [NEWS] Named chief financial officer Corie Barry as its next CEO, effective at the annual meeting on June 11.
Lyft (LYFT): [NEWS] The ride-hailing service is recalling several thousand electric bikes in three cities due to some braking issues. The recall affects bicycles in New York, Washington, and San Francisco.
Facebook (FB): [NEWS] Former White House chief of staff Erskine Bowles and Netflix CEO Reed Hastings will be leaving the Facebook board later this year.
American Airlines (AAL), Boeing (BA): [NEWS] Extended cancellations of flight’s involving Boeing’s 737 Max jet through August 19, affecting about 115 flights per day.
Walmart (WMT), Kroger (KR): [NEWS] Walmart and Kroger were among retail companies sent letters by the Food and Drug Administration asking for a plan of action to prevent the sale of tobacco products to minors.
Apple (AAPL): [NEWS] Apple is spending “hundreds of millions” of dollars on new video games for its upcoming Arcade subscription service, according to a report in the Financial Times.
Caesar’s Entertainment (CZR): [NEWS] Will name Affinity Gaming Chief Executive Officer Anthony Rodio as its next CEO and will evaluate takeover interest in the casino operator, according to the Wall Street Journal.
MOMENTUM STOCKS:
GAINERS: DIS, PCG, BHVN, PE, PXD, WES. EIX, FAST
DECLINERS: FGEN, DERM, ANTM, CNDT, GRUB, UNH, CVX, NFLX, X
TODAY’S IPOs:
None.