Contracts on the S&P 500, Nasdaq and Dow Jones all rose on Friday, signaling that the benchmarks may test record highs yet again, as a solid start to the fourth-quarter earnings season, easing trade tensions and mostly promising economic data all combined to boost sentiment.
The S&P 500 (+0.83%) closed at fresh record highs yesterday, following the US-China trade accord, a strong earnings report from Morgan Stanley (MS: +6.61%) and strong US Retail Sales figures.
Investors are heading into the weekend with the signing of a phase one trade agreement between Beijing and Washington behind them, paired with solid results from the biggest banks in the Unites States.
The earnings season will continue to ramp up next week; between now and then economic data is also supporting sentiment, with China’s GDP in line with estimates, fueling early optimism that China’s economic slowdown may have bottomed out at a near 30-year low.
Ahead, in today’s economic calendar, Friday includes; Building Permits and Housing Starts for December at 8:30am EST, Industrial and Manufacturing Production for December at 9:15am EST, followed by the Job Openings and Labor Turnover Survey for December at 10am EST.
Earnings reports are expected today from; Schlumberger (SLB), State Street (STT), Fastenal (FAST), Regions Financial (RF) and J.B. Hunt Transport Services (JBHT).
TODAY'S TOP HEADLINES
China & Economy: China’s Economic Growth Slows to Near 30-Year Low. (The WSJ)
On Friday, Chinese officials said the country emerged from 2019 with an official economic growth of 6.1%, well within the government’s target range of 6% to 6.5% but the lowest level in decades.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★★★ - Building Permits (Dec) (Previous: 1.474M)
08:30AM - ★★☆ - Housing Starts (MoM) (Dec) (Previous: 1.365M)
09:15AM - ★★☆ - Industrial Production (MoM) (Dec) (Previous: 1.1%)
09:15AM - ★☆☆ - Manuf. Production (MoM) (Dec) (Previous: 1.1%)
10:00AM - ★★★ - JOLTs Job Openings (Nov) (Previous: 7.267M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Tailored Brands (TLRD): [NEWS] Is selling its Joseph Abboud clothing brand trademarks to brand management firm WHP Global for $115 million.
Progress Software (PRGS): [EARNINGS] Reported quarterly earnings of 79 cents per share, beating forecasts by 4 cents a share. Revenue also beat estimates and the company gave a better-than-expected forecast for the current quarter and the full year.
Pinterest (PINS): [RATING] Wells Fargo raised its rating on the stock to “overweight” from “equal weight,” noting material underperformance in the shares despite solid fundamentals and audience engagement.
Gap (GPS): [NEWS] Abandoned its plan to spin off its Old Navy unit into a separate publicly traded company. Sales for the Old Navy business have slowed in recent months, casting some doubts on its value as a separate entity.
Schlumberger (SLB): [EARNINGS] Came in 2 cents a share above estimates, with quarterly earnings of 39 cents per share. Revenue also topped estimates. The company noted challenging market conditions but was able to benefit from strength in international markets.
CSX (CSX): [EARNINGS] Reported quarterly earnings of 99 cents per share, 3 cents a share above estimates. The railroad operator’s revenue was very slightly below forecasts. CSX reported a larger-than-expected 7% drop in freight volume during the quarter and is expecting another challenging year in 2020, even as it implements significant improvements in efficiency.
Twitter (TWTR): [DOWNGRADED] Was downgraded to “neutral” from “buy” at UBS, which said that Twitter’s ongoing investments into safety, security, and ad technology will act as an earnings headwind for 2020.
Alibaba (BABA): [NEWS] Shares of Ant Financial, an affiliate of the China-based e-commerce giant, are being offered privately at levels that value Ant at $200 billion, according to a Reuters report. Ant was valued at $150 billion during a 2018 fundraising round.
Ventas (VTR): [UPGRADE] Upgraded to “buy” from “hold” at Jefferies, which points to the health-care REIT’s valuation compared to competitors like Welltower (WELL) and Healthpeak (PEAK).
Alphabet (GOOGL): [NEWS] The Google parent’s market value topped $1 trillion for the first time Thursday.
Regions Financial (RF): [EARNINGS] Reported quarterly profit of 38 cents per share, a penny a share below estimates. Revenue beat forecasts. Among the negative factors in the quarter: a 4.1% drop in net interest income, although total revenue was up 3%.
Eli Lilly (LLY): [NEWS] Is aiming for $1 billion to $5 billion in acquisition deals during every quarter this year, according to Chief Financial Officer John Smiley. He told Reuters the drugmaker will focus on earlier stage opportunities in key areas like oncology, immunology, and neurology.
Comcast (CMCSA): [NEWS] Unveiled details of its Peacock streaming service, with plans to offer a free option as well as $5 per month and $10 per month plans. The service will debut in April for Comcast customers and in July for others.
MOMENTUM STOCKS
GAINERS: NVCR, RUN, WIFI, HOMB, EGHT, DDD
DECLINERS: AA
TODAY'S IPOs
Phoenix Tree (DNK) (Low: 14.50, High: 16.50) (Est. Vol: $164.3M)
I-MAB (IMAB) (Low: 12, High: 15) (Est. Vol: $100.0M)
Velocity Financial (VEL) (Price: 13) (Est. Vol: $94.3M)
LIZHI (LIZI) (Low: 11, High: 13) (Est. Vol: $49.2M)
