United States stock futures pointed to a slightly weak start for Wall Street on Wednesday, amid increasing signals of progress in US-China trade talks, paired with sustained suggestions from Donald Trump that negotiations between the two economies could be extended if both sides failed to reach an agreement by March.
Recent weekly advances in the US stock market show investors to be growing increasingly optimistic that the year-long trade spat, which has resulted in collective tariffs worth nearly $500 billion, ensuing global trade growth repercussions, may finally be heading toward a stalemate, with China’s trade delegation arriving in Washington later this week, to continue discussions.
These moves in pre-market follow suit to Tuesday’s session where US stocks kicked off a holiday-shortened with gains, as investors focused on US-China trade developments and strong sales growth at Walmart (WMT: +2.21%).
The S&P 500 ended the session positive +0.2%, led by a +0.62% rise in the Materials sector, with Consumer Staples (+0.52%) and Discretionary (+0.41%) shares also contributing to the rally.
The blue-chip Dow Jones Industrial Average, which counts Walmart among its members, rose +0.06%, while the Nasdaq Composite added 0.2% to its value.
The Federal Open Market Committee meeting minutes, scheduled for release at 2pm EST, look to take centre stage of today’s economic calendar, with Fed officials previously announcing no new changes to monetary policy following last month’s meeting, with officials pledging to be “patient” with rate hikes in the future.
In earnings; CVS Health (CVS), Avis Budget Group (CAR), Gannett (GCI) and NiSource (NI) are amongst the major companies scheduled to release their latest financial results today.
TODAY’S TOP HEADLINES:
Trade & China: Trump Eases Off Hard Deadline for China Tariffs. (The WSJ)
President Trump gave his firmest indication yet that the US may not increase tariffs on Chinese goods on March 1, as scheduled, despite statements by his top trade official that the US should stick to a firm deadline.
Economy & Markets: The next big market catalyst will be what the Fed says about its balance sheet this week. (CNBC)
The market has reason to believe that the Fed is going to stop raising interest rates for a while. Less certain is what the central bank will do with the $4 trillion of bonds left on its balance sheet.
Politics & China: New US tariffs on Chinese goods will be ‘catastrophic’ for global stocks, says China. (CNBC)
A Chinese state-run newspaper claimed in an editorial published late Tuesday that the US faces greater pressure to resolve its ongoing trade war with China because failed negotiations would likely have major consequences for stocks worldwide.
ECONOMIC CALENDAR:
Today’s Economical Announcements
08:55AM – ★☆☆ – Redbook (YoY) (Previous: 4.6%)
08:55AM – ★☆☆ – Redbook (MoM) (Previous: -1.8%)
02:00PM – ★★★ – FOMC Meeting Minutes
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
CVS Health (CVS): [EARNINGS] Reported adjusted quarterly profit of $2.14 per share, beating the $2.05 consensus estimate. Revenue missed forecasts. CVS also gave a weaker than expected full year outlook due to deterioration in its long-term care business.
Garmin (GRMN): [EARNINGS] Posted adjusted quarterly earnings of $1.02 per share, 22 cents a share above estimates. Revenue came in above forecasts.
LendingClub (LC): [EARNINGS] Reported adjusted quarterly profit of three cents per share, a penny a share above estimates. Revenue slightly below forecasts. The company’s 2019 revenue forecast of $765 million to $795 million falls below the consensus estimate of $796 million.
Cadence Design (CDNS): [EARNINGS] Reported adjusted quarterly profit of 52 cents per share, 5 cents a share above estimates. Revenue beat forecasts.
Southwest Airlines (LUV): [NEWS] Southwest is investigating a surge in maintenance-related flight disruptions, according to Chief Operating Officer Mike Van de Ven.
Wolverine World Wide (WWW): [EARNINGS] Earned an adjusted 52 cents per share for its latest quarter, 3 cents a share above estimates. Revenue missed forecasts, however, and the company’s 2019 adjusted earnings forecast range falls largely below current consensus.
Owens-Corning (OC): [EARNINGS] Beat estimates by 12 cents a share, with adjusted quarterly profit of $1.38 per share. Revenue beat estimates.
Teva Pharmaceutical (TEVA): [NEWS] Teva settled with the US in a case involving the drugmaker’s agreements with rivals. The government had charged that those agreements kept cheaper generic drugs off the market.
NxStage (NXTM): [NEWS] The Federal Trade Commission approved the acquisition of the U.S.-based home dialysis equipment maker by Germany’s Fresenius Medical Care. The companies agreed to sell NxStage’s bloodline tubing business in order to win approval for the $2 billion transaction.
Tesla (TSLA): [NEWS] Tesla is planning to launch a leasing option for its Model 3 automobile, according to the news website Electrek.
Gannett (GCI): [EARNINGS] Fell 2 cents a share short of estimates, with adjusted quarterly profit of 44 cents per share. Revenue missed forecasts.
Apple (AAPL): [NEWS] The company is hoping to combine its apps for the iPhone, iPad, and Mac by 2021, according to a Bloomberg report.
Herbalife Nutrition (HLF): [EARNINGS] Came in 2 cents a share, ahead of estimates with adjusted quarterly profit of 63 cents per share. Revenue came in slightly below consensus. Herbalife also raised its sales growth forecast for 2019.
MOMENTUM STOCKS:
GAINERS: JELD, NAVI, TEX, DAN, MRC, YETI, NGL
LOSERS: KO
TODAY’S IPOs:
None.