US stock futures drifted lower on Tuesday, following the largest share-price rally in over a month (SPY: +3.05%), ahead of a congressional testimony from Federal Reserve Chairman, Jerome Powell.
This shift came after further strains in a deteriorating US-China relationship put a damper on market sentiment; following reports that the Nasdaq planned new accounting standards that would make initial public offerings more difficult for Chinese companies.
Risk assets started the week strong, after Moderna (MRNA: +19.96%) fueled hopes for a Covid-19 vaccine; investors have since struggled to maintain high optimism as they monitored the economic-restart.
Later today, in Washington, Federal Reserve Chairman, Jerome Powell, plans to tell lawmakers that the central bank will use its “full range of tools to support the economy” as a result of pandemic disruptions.
Today’s economic calendar also includes; Building Permits and Housing Starts for April at 8:30am EST.
In corporate news; Walmart (WMT), Home Depot (HD) and Kohl's (KSS) are all scheduled to report their earnings today.
TODAY'S TOP HEADLINES
Coronavirus: Trump Threatens to Exit WHO, Leaving Xi to Fight Virus. (Bloomberg)
US President Donald Trump threatened to withdraw altogether from the World Health Organization, a move that would leave Xi Jinping as the most prominent voice leading the global fight against the pandemic.
Today's Economical Announcements.
08:30AM - ★★★ - Building Permits (Apr) (Previous: 1.350M)
08:30AM - ★★☆ - Housing Starts (Apr) (Previous: 1.216M)
10:00AM - ★★★ - Fed Chair Powell Testifies
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Advance Auto Parts (AAP): [EARNINGS] Earned 91 cents per share for the first quarter, missing the $1.73 a share consensus estimate. Revenue was also below forecasts, with comparable-store sales falling a greater-than-expected 9.3%.
Baidu (BIDU): [EARNINGS] Reported better-than-expected earnings and revenue for the first quarter, while the Chinese search engine giant also gave an upbeat current-quarter revenue forecast as China-based businesses reopen after strict lockdowns.
Walmart (WMT): [EARNINGS] Reported quarterly profit of $1.18 per share, 6 cents a share above estimates. Revenue came in above forecasts as well. Same-store sales were up 10%, compared to a consensus estimate of 7.2%. Walmart withdrew its 2020 guidance due to virus-related uncertainty and also announced it would discontinue the jet.com brand.
Home Depot (HD): [EARNINGS] Earned $2.08 per share for the first quarter, below the consensus estimate of $2.27 a share. Revenue and comparable-store sales beat Street forecasts, but the bottom line was weighed down by pandemic-related expenses. Home Depot also suspended its full-year outlook.
Southwest Airlines (LUV): [NEWS] In a Securities and Exchange Commission filing, the airline said it sees May operating revenue down 85% to 90% from a year ago, with June operating revenue down 80% to 85%. Southwest said it is seeing a modest improvement in passenger demand and bookings.
Kohl’s (KSS): [EARNINGS] Lost $3.20 per share for the first quarter, wider than the loss of $1.80 per share that analysts were expecting. Kohl’s also declined to provide comparable-store sales figures, citing closures. The company said it took steps to improve its liquidity and ended the quarter with $2 billion in cash.
Moderna (MRNA): [NEWS] Priced a secondary stock offering of 17.6 million common shares at $76 per share, while granting the underwriters an option to buy up to 2.64 million additional shares at the same price. The biotech firm’s stock had surged 20% Monday on positive vaccine study results, closing at $80.
Walt Disney (DIS): [NEWS & DOWNGRADE] Top streaming executive, Kevin Mayer, is leaving to become CEO at popular video app TikTok. Mayer had led the successful launch of the Disney+ streaming service in late 2019, and his departure is cited among the reasons for a downgrade of the stock to “hold” from “buy” at Loop Capital.
Carvana (CVNA): [NEWS] Announced a 5 million share offering of its class A common stock, planning to use proceeds for general corporate purposes.
J.C. Penney (JCP): [NEWS] Amazon.com (AMZN) is said to be eyeing all or part of the bankrupt retailer, according to a Women’s Wear Daily report.
T-Mobile US (TMUS): [NEWS] Japan’s Softbank will sell a large portion of its stake in the wireless carrier through a secondary stock offering, according to sources who spoke to CNBC’s David Faber. Morgan Stanley and Goldman Sachs will underwrite the offering.
Tesla (TSLA): [NEWS] The automaker’s car registrations in China fell 64% in April compared to March, according to figures from auto consulting firm LMC Automotive.
Delta Air Lines (DAL): [NEWS] Will keep jets no more than 60% full through at least July, according to sources who spoke to Reuters. Delta had said yesterday that it would cap first class seating at 50% and main cabin at 60% through June 30.
Amazon.com (AMZN): [NEWS] Had listings for 36,000 job openings at the end of April, 19% more than a year earlier, according to a review done by analysts at Citi. At the same time, job listings at Alphabet (GOOGL), Facebook (FB), and Netflix (NFLX) fell from a year earlier.
GAINERS: VIR, NVAX, TBIO, TRIP, SIX, CVET, ALLO
DECLINERS: FSCT, LMNX
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