US stock futures declined on Friday, as tensions heated after China announced plans to impose new national security laws on Hong Kong.
Hong Kong's Hang Seng Index closed down -5.56%, in its worst day since July 2015, after Beijing introduced measures that would give China more control over security in the semi-autonomous region.
President Donald Trump said the details of China's plan aren't yet known but "if it happens we’ll address that issue very strongly”.
This all risks choking the rally that took stock prices up from their March lows (SPY: +35.10% from 52W Low); spurred by stimulus measures and optimism for a swift global economic recovery.
The S&P 500 (-0.69%) finished lower, with signs mounting that President Trump will toughen his stance on China as a re-election bid.
In corporate news; Alibaba (BABA), Deere (DE) and Foot Locker (FL) will report their latest financial data today.
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China & Politics: China Plans New National-Security Laws for Hong Kong. (The WSJ)
China signaled it will impose new national-security laws on Hong Kong, dealing a blow to the territory’s autonomy as Beijing seeks to stamp widespread pro-democracy protests that have challenged Xi Jinping.
Today's Economical Announcements.
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STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Foot Locker (FL): [EARNINGS] Lost 67 cents per share for its latest quarter, wider than the 25 cents a share loss that Wall Street was expecting. The athletic footwear and apparel retailer’s revenue also missed estimates, with comparable sales plunging a wider-than-expected 42.8%. Foot Locker has also temporarily suspended its quarterly dividend.
e.l.f. Beauty (ELF): [EARNINGS] Doubled expectations with quarterly earnings of 10 cents per share. The cosmetics retailer’s revenue also topped estimates. The company said the pandemic has impacted its sales, and it expects continued negative impact until consumers return to normal shopping patterns.
Hewlett Packard Enterprise (HPE): [EARNINGS] Fell 7 cents a share short of estimates, with quarterly earnings of 22 cents per share. The enterprise cloud computing company’s revenue also fell short, with HPE’s business impacted significantly by the coronavirus outbreak. The company also unveiled a cost-cutting plan designed to save at least $1 billion by 2022.
Alibaba (BABA): [EARNINGS] Beat estimates on both the top and bottom lines for its fiscal fourth quarter, and topped $1 trillion in gross merchandise volume for the first time in the just-concluded fiscal year. Alibaba benefited from an increase in online shopping due to the coronavirus outbreak.
Palo Alto Networks (PANW): [EARNINGS] Reported quarterly earnings of $1.17 per share, compared to a consensus estimate of 94 cents a share. The cybersecurity company’s revenue also beat Wall Street forecasts, and it said it will benefit from a continued increase in remote working.
Nvidia (NVDA): [EARNINGS] Beat estimates by 11 cents a share, with quarterly earnings of $1.80 per share. The graphics chipmaker’s revenue also beat forecasts. Nvidia gave an upbeat forecast, on surging demand for its chips that are used in data centers.
Splunk (SPLK): [EARNINGS] Reported a quarterly loss of 56 cents per share, a penny a share smaller than Wall Street had expected. Revenue came in short of forecasts, but the maker of data analytics software said it expected stronger demand for its cloud services as more people shift to working from home.
Ross Stores (ROST): [EARNINGS] Reported a quarterly loss of 87 cents per share, surprising analysts who had expected a profit of 3 cents per share. The discount retailer’s revenue also fell short of estimates as the coronavirus outbreak forced it to close stores, but Ross did say it began reopening stores last week.
Deckers (DECK): [EARNINGS] Earned 57 cents per share for its fiscal fourth quarter, well above the 9 cents a share consensus estimate. The maker of UGG boots and Teva sandals posted revenue that came in above forecasts, although it said it is facing challenges due to virus-related store shutdowns. Deckers is not providing guidance for the current fiscal year due to uncertainty surround the pandemic’s impact.
Deere (DE): [EARNINGS] Reported fiscal second-quarter earnings of $2.11 per share, compared to the consensus estimate of $1.62 a share. Revenue beat estimates as well. Deere said it expects global equipment sales to fall 30% to 40% this year as the Covid-19 pandemic weighs on demand.
Lululemon (LULU): [NEWS] Reopened more than 150 of its retail locations, with the athletic apparel maker planning to reopen about 200 more stores over the next two weeks. It has instituted a new set of reopening guidelines, including enhanced cleaning, modified hours, and limits to the number of customers in a store at any one time.
Alphabet (GOOGL): [NEWS] Proxy adviser ISS recommended that shareholders vote against executive pay proposals at the Google parent’s annual meeting in June. ISS criticized the proposals as “outsized awards that are not sufficiently performance-based.”
IBM (IBM): [NEWS] Will cut an unspecified number of jobs, the first workforce reduction under new CEO Arvind Krishna, who took over from Ginni Rometty earlier this year. A person familiar with IBM’s plans told The Wall Street Journal that several thousand workers are likely to be affected.
GAINERS: BJ, SONO, BURN, ARNA, GMED, ATRA, SPOT
DECLINERS: CEMI, BDX
Inari Medical (NARI) (Price: 19) (Est. Vol: $155.8M)
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