European and Asian shares drifted mostly lower, while US equity-index futures traded largely mixed into the early hours of the morning, as investors looked to interpret a batch of earnings against a backdrop weak economic data, which has resurfaced global growth concerns.
A surprise contraction in first-quarter GDP from South Korea, followed by pledge from the Bank of Japan to keep interest rates near zero until at least next year has seemingly nudged investors towards safer assets. This stance has compounded upon a similar dovish tilt expressed the Bank of Canada, paired with weakening business sentiment in Germany, both reported earlier this week.
These moves in pre-market look to extend upon yesterday’s relatively uncertain price action, where the S&P 500 hit the ‘snooze button’ a day after setting a fresh 2019 record closing high. Energy (-1.75%), Communication Services (-0.70%) and Basic Materials (-0.62%) were among the sectors which led major indices lower on Wednesday, with the benchmark index ending the session -0.22% lower overall.
Meanwhile, the tech-heavy Nasdaq Composite, which closed at a record all-time high on Tuesday, broke above its previous intraday peak during yesterday’s session but ultimately also closed lower, -0.32%.
Despite recent hesitancy, the S&P remains +16.9% higher in 2019, elevated by solid earnings and a dovish tone from global central banks. Investors will now look to company earnings to breathe new life into the global stocks rally, with mostly positive results having mitigated concerns over the short-term global economic outlook thus far.
In today’s economic calendar, Thursday includes; Weekly Jobless Claims and Durable Goods Orders data for March at 8:30am EST.
In corporate news; Amazon.com (AMZN), Intel (INTC), 3M (MMM), Ford (F), Southwest Airlines (LUV), AbbVie (ABBV), Bristol-Myers Squibb (BMY), Starbucks (SBUX), Comcast (CMCSA), D.R. Horton (DHI), United Parcel Service (UPS) and Waste Management (WM) are amongst the major companies scheduled to publish their Q1 2019 financials today.
TODAY’S TOP HEADLINES:
Politics: Biden Enters Democratic Campaign for President as Front-Runner. (Bloomberg) Former Vice President Joe Biden announced Thursday that he is running for the 2020 Democratic presidential nomination, positioning himself as the only candidate who can defeat President Donald Trump.
Politics & North Korea: North Korea wants to denuclearize but needs security guarantees, Putin says after Kim talks. (CNBC) Russian President Vladimir Putin said that North Korean leader Kim Jong Un wants to denuclearize but needs “security guarantees” to do so. Speaking after a high-profile summit with Kim, Putin said Russia favored denuclearization on the Korean Peninsula and Kim agreed, but said bilateral security guarantees were not enough.
ECONOMIC CALENDAR: Today’s Economical Announcements.
08:30AM – ★☆☆ – Weekly Jobless Claims (Previous: 192,000) 08:30AM – ★★☆ – Durable Goods (MoM) (Mar) (Previous: -1.6%) 08:30AM – ★★★ – C. Durable Goods (Mar) (Previous: -0.1%)
STOCKS IN THE SPOTLIGHT: Pre-Market Movers & News Related Stocks.
3M (MMM): [EARNINGS] Earned an adjusted $2.23 for the first quarter, missing the consensus estimate of $2.49 a share. Revenue also fell short of forecasts and 3M cut its full-year forecast. The manufacturing giant also announced it will cut about 2,000 jobs.
Facebook (FB): [EARNINGS] Reported adjusted quarterly profit of $1.89 per share, compared to the $1.63 a share consensus estimate. Revenue also beat forecasts. Facebook’s top and bottom lines, as well as user numbers, hit record highs during the quarter.
Microsoft (MSFT): [EARNINGS] Beat estimates by 14 cents a share, with quarterly profit of $1.14 per share. Revenue also beat forecasts on a surge on cloud revenue and software subscriptions.
PayPal (PYPL): [EARNINGS] Reported adjusted quarterly profit of 78 cents per share, 10 cents a share above estimates. Revenue matched forecasts. PayPal also reported that more than 40 million people made transactions using its Venmo service over the past 12 months, making it one of the most popular financial apps in the country.
Chipotle Mexican Grill (CMG): [EARNINGS] Reported adjusted quarterly earnings of $3.40 per share, beating consensus forecasts by 39 cents a share. Comparable store sales rise by a better than expected 9.9%, and its digital revenue more than doubled while accounting for 15.7% of sales.
UPS (UPS): [EARNINGS] Came in 2 cents a share short of estimates, with adjusted quarterly profit of $1.39 per share. The delivery company’s revenue also missed forecasts. UPS said bad weather had a significant impact on its performance during the quarter.
DR Horton (DHI): [EARNINGS] Earned 93 cents per share for its fiscal second quarter, 7 cents a share above estimates. Revenue also beat forecasts; however, the company gave a softer-than-expected full-year forecast, partly due to rising costs.
Tesla (TSLA): [EARNINGS] Lost an adjusted $2.90 per share for the first quarter, wider than the 69 cents a share loss that Wall Street was expecting. Revenue was below forecasts. Tesla said it expects to return to profit in the third quarter of 2019, on cost cuts and improvements in delivery.
Shutterfly (SFLY): [NEWS] Shutterfly may be a takeover candidate, with Bloomberg reporting that private-equity firms Apollo Global and Cerberus are considering a bid for the online photo sharing company.
Comcast (CMCSA): [EARNINGS] Beat estimates by 8 cents a share, with adjusted quarterly profit of 76 cents per share. Revenue was short of consensus. Comcast’s total customer relationships rose by 3.5%, with cable communications revenue up 4.2% and high-speed internet revenue up 10.1%.
Southwest Airlines (LUV): [EARNINGS] Profits fell 16% from a year ago, due largely to the grounding of its Boeing 737 Max jets. The airline’s bottom line came in 9 cents a share above estimates, at an adjusted 70 cents per share. Revenue also topped estimates.
Waste Management (WM): [EARNINGS] Reported adjusted quarterly earnings of 94 cents per share, 2 cents a share above estimates. Revenue beat estimates, as well. The company also said that efforts to improve its recycling business are showing positive results.
Walmart (WMT): [NEWS] British regulators have blocked the proposed $9.4 billion takeover of Walmart’s Asda supermarket operator by rival Sainsbury, saying it would lessen competition.
Visa (V): [EARNINGS] Came in 7 cents a share ahead of estimates, with quarterly profit of $1.31 per share. The payment network also reported a slight revenue beat as an increase in consumer spending boosted its results. Visa also raised its full-year forecast. On the negative side, Visa did see a slide in the value of transactions made outside a customer’s home country.
Deutsche Bank (DB): [NEWS] Deutsche Bank and German banking rival Commerzbank have ended their merger talks, saying the combination would not have created sufficient benefits.
GAINERS: SFLY, BURL, TER, GNTX, EBAY, HAS DECLINERS: IRBT, RES, ROL, TUP, HA, STT, ALB