US stock market futures are set to open notably negative into Friday’s opening bell as weaker-than-expected data in China provokes the tail-end of a rocky week for investor sentiment, adding to concerns of a global economy slowdown.
Thursday’s session saw Wall Street end mixed as investors adopted a cautious tone while awaiting progress in trade negotiations between Washington and Beijing.
The S&P 500 reluctantly gave up its +0.7% gap up to end -0.03% lower. Market participants took a more defensive approach with advances in Utilities (+0.87%) and Consumer Staples (+0.62%) being offset by declines in the Material (-1.17%) and Financial (-0.73%) sectors.
The Dow Jones Industrial Average ended positive +0.16%, while the Nasdaq came in +0.03% higher.
Retailers were amongst those hard-hit with; Macy’s (M:-4.41%), Under Armour (UAA: -5.25%) and Best Buy (BBY: -5.17%) all negative.
General Electric (GE) took centre stage, up +7.3%, after agreeing to sell a majority stake in its software business to private equity firm Silver Lake.
US investors also digested the European Central Bank’s latest monetary policy decision, in which the bank called a halt on its €2.6TN bond-buying stimulus programme, as was widely expected.
On today’s data front, investors are likely to monitor; Retail Sales figures for November at 8:30am ET, followed by Industrial Production data as well as Manufacturing and Services PMI figures at 9:15am EST.
TODAY’S TOP HEADLINES:
Markets & China: Stock markets recoil from weak China data. (FT)
Worries about the impact of the trade war between China and the US on global economic growth knocked stock markets following a run of weak economic data from Beijing to Europe.
Equities indices in Hong Kong, Shanghai and Shenzhen were down almost 2% after Chinese industrial output expanded by the narrowest margin in three years. China’s retail sales grew at their slowest pace in more than 15 years in November, adding to fears of a deepening slowdown.
China & Trade: China says it will suspend its 25 percent additional tariff on US autos. (CNBC)
China confirms it will suspend its additional 25% tariff on imports of US autos. The reduced barrier, which is the same as pre-trade war levels, will be put in place for 90 days from January 1.
Politics: Trump Inaugural Fund and Super PAC Said to Be Scrutinized for Illegal Foreign Donations. (The NYT)
Federal prosecutors are examining whether foreigners illegally funneled donations to President Trump’s inaugural committee and a pro-Trump super PAC in hopes of buying influence over American policy, according to people familiar with the inquiry.
Today’s Economical Announcements
08:30AM – Core Retail Sales (MoM) (Nov) (Previous: 0.7%)
08:30AM – Retail Sales (MoM) (Nov) (Previous: 0.8%)
09:15AM – Industrial Production (YoY) (Previous: 4.1%)
09:15AM – Industrial Production (MoM) (Nov) (Previous: 0.1%)
09:15AM – Manufacturing PMI (Dec) (Previous: 55.3)
09:45AM – Services PMI (Dec) (Previous: 54.7)
10:00AM – Business Inventories (MoM) (Oct) (Previous: 0.3%)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Costco (COST): Reported adjusted quarterly profit of $1.61 per share, one cent shy of estimates. Revenue beat forecasts.
Starbucks (SBUX): Announced that same-store sales growth would remain steady at between three to four percent annually over the long term, even as it expands delivery options and nearly doubles stores in China.
Walgreens Boots Alliance (WBA): Goldman Sachs downgraded the stock to “sell” from “neutral”, saying challenges in the retail pharmacy business have intensified and that other initiatives will not produce enough revenue to offset a declining core business.
Cisco Systems (CSCO): Downgraded to “buy” from “neutral” at Nomura/Instinet, which thinks IT spending strength may diminish in 2019.
Adobe Systems (ADBE): Earned an adjusted $1.90 per share for its latest quarter, beating estimates by two cents. Revenue above forecasts.
Apple (AAPL): Apple will push software updates to users in China, in a bid to avoid the impact of a court ban on some of its iPhone models in that country.
Regeneron Pharmaceuticals (REGN): Upgraded to “buy” from “neutral” and added to the “Conviction Buy” list at Goldman Sachs. Goldman said the drug maker has a robust product pipeline, and that any negatives involving the long-term market for its eye drug Eylea are already priced in.
Ford (F): Rated “buy” in new coverage at Deutsche Bank, which said industry headwinds have prompted deep restructuring and could prompt further collaboration and even consolidation.
General Motors (GM): Rated “buy” in new coverage at Deutsche Bank, which said industry headwinds have prompted deep restructuring and could prompt further collaboration and even consolidation.
Tesla (TSLA): Tesla was rated “outperform” in new coverage at Wedbush, which said the automaker has revolutionized consumer buying habits and has an impressive product roadmap.
Procter & Gamble (PG): Upgraded for a second straight day, this time by Morgan Stanley. The firm said P&G’s gross margins are improving, and revenue and earnings are growing faster than those of its peers.
Facebook (FB): Facebook is planning a further push into video, with Recode reporting that it would like to sell consumers subscriptions to cable TV networks like HBO.
Belmond (BEL): Belmond agreed to be bought by French luxury goods maker LVMH for $3.2 billion including assumed debt, or $25 per share for the Bermuda-based luxury hotel operator.
LOSERS: TLRD, XPO, MNST, HBI, UAA, PSA
360 Finance (QFIN) (Low: 16.50, High: 18.50) (Shares: 3.1M)
Chardan Healthcare Acquisition (CHACU) (Price: 10) (Shares: 7M)
Legacy Housing (LEGH) (Low: 10.75, High: 12.75) (Shares: 3.5M)