New York equity index futures traded lower on Tuesday, amid a series of geopolitical developments which trimmed risk appetite overseas in the Europe and Asia – now rippling onto Wall Street ahead of a Senate testimony from Federal Reserve Chairman, Jerome Powell.
President Donald Trump departed to Vietnam for a summit with North Korean leader, Kim Jong Un, scheduled to take place on Wednesday, in Hanoi, in which the two leaders attempt to solidify terms of their 2018 meeting in Singapore aimed at the denuclearization of the Korean Peninsula.
Before heading to the region, Trump told reporters on Monday in Washington that his trade team was “very close” to cutting a deal with China following weeks of negotiations between Washington and Beijing, adding it “could happen fairly soon, or it might not happen at all”.
Trump’s reported ‘non-committal’ stance on trade talk progress, despite his decision to extend the March deadline on tariffs, tarnished global market sentiment.
These moves in pre-market come after Monday’s trading session, where US stocks pushed higher, with the S&P 500 closing at its highest mark in more than three months, after reassuring Twitter posts from Donald Trump fanned optimism over trade talks with China.
The benchmark S&P 500 gained +0.14%, supported by a rally in Material (+0.65) and Industrial (+0.39%) shares, both of which, considered beneficiaries of a trade deal.
The Dow Jones Industrial Average rose +0.28%, while the Nasdaq Composite gained +0.36%.
In today’s data front, investors are likely to monitor Building Permits and Housing Starts data for December at 8:30am and 9:00am EST, respectively – followed by Consumer Confidence figures and Jerome Powell’s Senate testimony at 10am EST.
In corporate news, Home Depot (HD) and Macy’s (M) are amongst the major companies set to publish their latest quarterly results before today’s opening bell.
Meanwhile, Mylan (MYL), IMAX (IMAX) and Papa John’s (PZZA) are all scheduled to report their results after market close.
TODAY’S TOP HEADLINES
Politics: Michael Cohen is expected to tell Congress that Trump broke the law while in office. (CNBC)
President Donald Trump’s former personal lawyer Michael Cohen is expected to tell lawmakers this week about alleged criminal conduct Trump committed while in office, NBC News reported, citing a knowledgeable source.
North Korea & Politics: Kim Jong Un Goes From Trump’s ‘Little Rocket Man’ to ‘We’re in Love’. (The WSJ)
When President Trump sits down this week for a second summit with North Korea’s Kim Jong Un, he will face a young dictator who has grown in outward confidence as a negotiator since their last meeting. That could make it tougher to convince Mr. Kim to give up his nuclear weapons, longtime observers of the secretive leader say.
ECONOMIC CALENDAR
Today’s Economical Announcements
08:30AM – ★★★ – Building Permits (Dec) (Previous: 1.322M)
08:30AM – ★★☆ – Building Permits (MoM) (Dec) (Previous: 5.0%)
09:00AM – ★★☆ – Housing Starts (Dec) (Previous: 1.256M)
09:00AM – ★★☆ – Housing Starts (MoM) (Dec) (Previous: 3.2%)
10:00AM – ★★★ – CB Consumer Conf. (Feb) (Previous: 120.2)
10:00AM – ★★★ – Fed Chair Powell Testifies
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks
Tenet Healthcare (THC): [EARNINGS] Reported adjusted quarterly profit of 51 cents per share, well above the consensus estimate of 28 cents a share. The hospital operator’s revenue also came in above analysts’ forecasts, and it said it had meaningfully improved its financial performance during 2018.
Mallinckrodt (MNK): [EARNINGS] Earned an adjusted $2.18 per share for its latest quarter, compared to the consensus estimate of $1.92 a share. Revenue was well above estimates, and Mallinckrodt also gave a better-than-expected earnings forecast for 2019.
Etsy (ETSY): [EARNINGS] Beat estimates by 11 cents a share, with quarterly earnings of 32 cents per share. Revenue beat forecasts. Etsy also issued strong 2019 revenue guidance.
Hertz Global (HTZ): [EARNINGS] Lost 55 cents per share for its latest quarter, smaller than the 90 cents a share that analysts were expecting. Revenue beat forecasts, and Hertz said it had strong momentum going into 2019.
Macy’s (M): [EARNINGS] Beat earnings with an adjusted $2.53 per share above consensus estimate for the fourth quarter. Revenue beat forecasts.
J.M. Smucker (SJM): [EARNINGS] Reported adjusted quarterly profit of $2.26 per share, 25 cents a share above estimates. Revenue beat forecasts.
Tesla (TSLA): [NEWS] The Securities and Exchange Commission asked a federal judge to hold Tesla CEO Elon Musk in contempt of court, saying he violated a settlement reached last year by tweeting about the automaker’s projected production volumes last week. Musk on Tuesday lashed out at the SEC in response, tweeting: “Something is broken with SEC oversight.”
Caterpillar (CAT): [DOWNGRADE] Downgraded to “sell” from “buy” at UBS, which predicted that the majority of the heavy equipment maker’s end markets will peak this year, and that revenue and margins will come under pressure in 2020 as demand declines.
Home Depot (HD): [EARNINGS] Earned $2.09 per share for the fourth quarter, below the $2.16 a share consensus estimate. Home Depot also noted a 16-cents-a-share one-time impairment loss related to its Interline Brands unit. Revenue below forecasts.
Foot Locker (FL): [DOWNGRADE] Downgraded to “hold” from “buy” at Pivotal Research in a valuation call. The athletic apparel and footwear retailer’s stock is up 21 percent over the past 12 months, and Pivotal also points to tough comparisons in coming quarters.
Discovery Communications (DISCA): [EARNINGS] Beat estimates by 2 cents a share, with adjusted quarterly profit of 82 cents per share. Revenue below forecasts.
Shake Shack (SHAK): [EARNINGS] Reported adjusted quarterly profit of 6 cents per share, beating the consensus estimate of 3 cents a share. Revenue above forecasts. However, Shake Shack’s forward guidance was largely below Wall Street projections.
Amazon (AMZN): [NEWS] Amazon announced the addition of former PepsiCo CEO Indra Nooyi to its board of directors.
Amgen (AMGN): [NEWS] Amgen won a court decision confirming patents for its cholesterol drug Repatha, turning back a challenge from Sanofi and Regeneron Pharmaceuticals.
MOMENTUM STOCKS
GAINERS: AAOI, FTCH, CPRT
LOSERS: KHC, CPB
TODAY’S IPOs
Super League Gaming (SLGG) (Low: 10, High: 12) (Shares: 2.3M)