US stocks have seemingly taken heart to Fed Chairman, Jerome Powell’s, dovish comments; having traded mostly higher overnight on the backs of what has been a record-breaking trading week for Wall Street.
Equity futures pointed higher into Friday’s open, a day after both the S&P 500 and Dow Jones had closed at all-time highs, as investors continued to expect interest rate support from the Federal Reserve while betting on the underlying strength of the domestic economy.
Powell had repeated his view that US interest rates have room to go lower during the final day of his two-day testimony on monetary policy.
He told the Senate Banking Committee on Capitol Hill; "We're learning that the neutral interest rate is lower than we had thought and I think we're learning that the natural rate of unemployment is lower than we thought", "So monetary policy hasn't been as accommodative as we had thought".
These words, which had relieved worries that the Fed could be put off its path to cutting rates following last week’s unexpected jobs market out-performance, also helped see the S&P 500 edge +0.23% higher, climbing back over the 3,000-point threshold.
Meanwhile, the blue-chip Dow Jones Industrial Average index rose +0.83%, aided by shares in UnitedHealth (UNH: +5.53%) after the Trump administration dropped a plan to limit drug rebates. While, the Nasdaq Composite ended the session down- 0.07% after setting a new closing high in the prior session.
Ahead, today’s economic calendar includes; the Producer Price Index for June at 8:30am EST.
TODAY'S TOP HEADLINES
China & Trade: Beijing Signals Talks at Early Stage as Trump Vents Frustration. (Bloomberg)
Trump complained Thursday that China hasn’t boosted its purchases of US farm products, a promise he claims he secured in a meeting with his counterpart Xi Jinping in June. But according to officials in Beijing familiar with the talks, no such agreement was made.
Cryptocurrencies: Trump: I’m ‘not a fan’ of cryptocurrencies, and Facebook may need a banking charter for Libra. (CNBC)
US President Donald Trump on Thursday said he’s “not a fan” of cryptocurrencies, and suggested that Facebook may need a banking charter if the company wants to launch the digital token Libra.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★★☆ - Core PPI (MoM) (Jun) (Previous: 0.2%)
08:30AM - ★★★ - PPI (MoM) (Jun) (Previous: 0.1%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Illumina (ILMN): [EARNINGS] Reported preliminary revenue figures that disappointed investors. The company sees second-quarter sales coming in around $835 million. Analysts polled by Refinitiv expected revenue of $887.9 million.
Milacron (MCRN): [BUYOUT] Will be bought by Hillenbrand (HI) in a cash and stock deal that values it around $2 billion. The deal is expected to close in the first quarter of 2020.
Zoom Video Communications (ZM): [RATING] Initiated with an “overweight” rating at Stephens for its market leadership in video conferencing and team messaging.
Altria (MO): [UPGRADE] Goldman Sachs upgraded the tobacco company’s stock to “buy” from “neutral,” noting that tobacco stocks valuations are at a 10-year low. “We expect the current discount being placed on tobacco stocks to narrow as cigarette fundamentals hold up better than feared”.
Deutsche Bank (DB): [UPGRADE] UBS upgraded Deutsche Bank’s stock to “neutral” from “sell,” noting a more “balanced risk/reward” scenario after the German bank announced a massive restructuring plan earlier this month.
Slack Technologies (WORK): [RATING] Initiated with an “overweight” rating at Stephens for its market leadership in video conferencing and team messaging.
Wells Fargo (WFC): [DOWNGRADE] Downgraded to “neutral” from “buy” by an analyst at Citi, which noted the stock has “limited upside from current levels” and is waiting for a more “attractive entry point.”
Boeing (BA): [NEWS] The head of Boeing’s 737 program is retiring.
MOMENTUM STOCKS
GAINERS: WW, ESTC, NVCR, ANTM, UNH
DECLINERS: ZBRA, IRM, AIMT, GEO, MAN, VSH, MRK, MOS
TODAY'S IPOs
Pivotal Investment (PIC.U) (Price: 10) (Est. Vol: $200.0M)
SC Health (SCH.U) (Price: 10) (Est. Vol: $150.0M)
Tuscan Holdings (THCAU) (Price: 10) (Est. Vol: $150.0M)
