Global stocks traded cautiously into the early hours of this morning, ahead of an event-packed week, featuring; earnings reports from close to a third of all S&P 500 companies, a resumption of US-China trade talks, an expected Federal Reserve interest-rate cut and an American payrolls report.
Corporate profits have been more-resilient-than-expected during this second quarter, with average earnings among S&P 500 companies up +0.7% from a year earlier - data which has proved to support the stock market at all-time-highs, amid a period of sustained worries surrounding global economic growth and trade.
Attention will turn to the Federal Reserve on Wednesday, following a two-day meeting, in which policymakers will announce their assessment of global economy and their position on interest rates.
Economists expects the central bank to lower its benchmark interest rate by a quarter-point, which would mark the first cut in 10 years, due to impacts of a weakened global economy.
Meanwhile, wider attention will turn to trade negotiations between the US and China, which are reported to resume on Tuesday in Shanghai, with Treasury Secretary, Steven Mnuchin, and Trade Representative, Robert Lighthizer, scheduled to participate in two-day talks with a delegation led by China's Vice Premier, Liu He.
Neither side has signaled much hope for a breakthrough. President Donald Trump said on Friday; "I don't know if they're going to make a deal", "Maybe they will, maybe they won't. I don't care".
This morning’s widely uncertain start to the week follows suit to Friday’s session, where the S&P 500 & Nasdaq closed at record highs, in the wake of better than expected US economic growth data and a rally in Technology stocks (+0.22%), led by Google’s parent, Alphabet (GOOGL: +9.62%).
The S&P 500, ended the day +0.67% higher, while the tech-heavy Nasdaq climbed +1.03%. The Dow Jones Industrial Average, however, added just +0.17% to its value.
Ahead, in today’s corporate news, earnings are expected from; Beyond Meat (BYND), Baidu (BIDU), AK Steel (AKS), Del Taco Restaurants (TACO), NXP Semiconductors (NXPI), National Oilwell Varco (NOV) and Transocean (TXRH).
TODAY'S TOP HEADLINES
Economy & Interest Rates: Former Fed Chair Janet Yellen says she’s in favor of an interest rate cut. (CNBC)
Former Federal Reserve Chair Janet Yellen said she supports a 25-basis-point cut in the central bank’s benchmark interest rate, as the global economy weakens and inflation in the United States is lower.
China & Trade: US-China Trade Talks Set to Resume With Modest Expectations. (The WSJ)
Negotiators for the US and China will face off in Shanghai this week in another attempt to piece together a trade accord amid much lowered expectations for the kind of sweeping deal that appeared within reach this spring.
Today's Economical Announcements.
10:30AM - ★☆☆ - Dallas Fed Business Index (Jul) (Previous: -12.1)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Pfizer (PFE): [MERGER & EARNINGS] Is merging its off-patent drug unit with Mylan (MYL) in a stock swap deal to form a new entity, to be 43% owned by Mylan shareholders with Pfizer shareholders owning the rest. Separately, Pfizer reported adjusted quarterly profit of 80 cents per share, 5 cents a share above estimates. Mylan reported adjusted quarterly profit of $1.03 per share, beating consensus by 8 cents a share.
Genomic Health (GHDX): [BUYOUT] Agreed to be bought by cancer diagnostics company Exact Sciences (EXAS) for $2.8 billion in cash and stock. The deal will strengthen Exact Sciences’ lineup of cancer testing products. Exact Sciences also issued its quarterly numbers, losing 30 cents per share compared to a consensus estimate of a 56 cent loss. Revenue exceeded forecasts.
Blackstone (BX): [NEWS] London Stock Exchange is in advanced talks to buy financial data provider Refinitiv, majority owned by Blackstone, for $27 billion including assumed debt.
Gilead Sciences (GILD): [UPGRADE] RBC Capital upgraded the drug maker’s shares to “top pick” from “outperform,” pointing to new leadership at the company and that a number of previously noted overhangs are now out of the way.
Domino’s Pizza (DPZ): [RATING] Rated “sell” in new coverage at Deutsche Bank, which points to the “competitive intrusion” of third-part delivery aggregators. Deutsche Bank said the competitive pressure will increase in magnitude over the next 2 to 3 years.
BlackRock (BLK): [NEWS] Is in talks to buy cybersecurity company Cofense, according to a Reuters report.
Coca-Cola (KO): [RATING] Atlantic Equities rates the company as “overweight” in new coverage, with a positive consumer environment and easing commodity cost inflation among the positive factors.
PepsiCo (PEP): [RATING] Atlantic Equities rates the company as “overweight” in new coverage, with a positive consumer environment and easing commodity cost inflation among the positive factors.
GAINERS: MAT, INT, TTD, SBUX, TWTR, FDC, ZBH, FISV, DBD, UPS
DECLINERS: MHK, COG, DECK, WMB
WE WILL SHOW YOU THE WAY!