Expectations of easing trade tensions between the US and China look to buoy Wall Street on Friday, building on the recent rally in risk assets; US pre-market futures positive, across the board, into the open.
The stock market was given an afternoon boost, during yesterday’s session, after the Wall Street Journal reported that US officials had debated scaling back tariffs on Chinese goods, turning investors’ attention to a possible thaw in the long-running trade battle.
Responding in a statement, the Treasury department said the officials have made no recommendations on tariffs and the process with China is “nowhere near completion” – sapping much of the market’s enthusiasm.
Despite this, Material (+1.76%) and Industrial (+1.71%) stocks, belonging to the two sectors seen as benefiting from potential tariff relief, led the S&P higher.
The S&P 500 closed +0.76%, just shy of its +1.1% intraday high. Meanwhile the blue-chip Dow Jones and tech-heavy Nasdaq Composite rose +0.8% and +0.79% apiece.
In today’s economic data front, Industrial and Manufacturing production figures are set to be released at 9:15am ET, followed by Michigan Consumer Expectation and Sentiment numbers due at 10am ET.
Meanwhile, with the earnings season in full swing, investors will be watching out for results from Schlumberger (SLB), Citizens Financial (CFG), State Street (STT), SunTrust (STI), VF Corporation (VFC), Regions Financial (RF), First Horizon National (FHN) and Kansas City Southern (KSU) – all expected to report today.
TODAY’S TOP HEADLINES:
Brexit: Brexit row erupts as opposition party rejects Theresa May’s offer for talks. (CNBC)
The British government has insisted that cross-party talks to find a consensus on Theresa May’s Brexit plans have been “constructive,” despite the refusal of Labour leader Jeremy Corbyn to engage in discussions with the prime minister unless she categorically rules out the possibility of the UK leaving the European Union without a deal.
Today’s Economical Announcements
09:05AM – ★★☆ – FOMC Member Williams Speaks
09:15AM – ★★☆ – Industrial Prod. (MoM) (Dec) (Previous: 0.6%)
09:15AM – ★☆☆ – Manufacturing Prod. (MoM) (Dec) (Previous: 0.0%)
10:00AM – ★★☆ – Michigan Consumer Expect. (Jan) (Previous: 87.0)
10:00AM – ★★☆ – Michigan Consumer Senti. (Jan) (Previous: 98.3)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Tesla (TSLA): [NEWS] Is cutting its full-time workforce by 7 percent to lower costs, according to an employee memo.
SunTrust Banks (STI): [EARNINGS] Earned and adjusted $1.50 per share for its latest quarter, beating the $1.37 a share consensus estimate, revenue above forecasts.
Netflix (NFLX): [EARNINGS] Reported quarterly profit of 30 cents per share, beating Street estimates by 6 cents a share. Revenue short of forecasts.
American Express (AXP): [EARNINGS] Earned an adjusted $1.74 per share for the fourth quarter, 6 cents a share shy of estimates. Revenue missed forecasts.
VF Corp. (VFC): [EARNINGS] Earned an adjusted $1.31 per share for the fiscal third quarter, 21 cents a share above estimates. Revenue beat forecasts.
Eli Lilly (LLY): [NEWS] Said study results did not confirm the clinical benefit of its Lartruvo sarcoma treatment.
CVS Health (CVS), Walmart (WMT): [NEWS] CVS and Walmart have signed a new multiyear agreement which will keep Walmart in the CVS Caremark pharmacy benefit network.
Alibaba (BABA): [NEWS] Is postponing hiring and cutting travel spending, according to a Bloomberg report.
J.B. Hunt Transportation (JBHT): [EARNINGS] Reported adjusted quarterly profit of $1.78 per share, beating estimates by 30 cents a share. Revenue topped forecasts.
Tiffany (TIF): [EARNINGS] Reported a 2 percent decline in comparable sales for the two-month holiday period, and said earnings for the fiscal year ending January 31 will be toward the lower end of its prior guidance of $4.65 to $4.80 per shares. Current full year Wall Street earnings consensus is at $4.77 a share.
Citizens Financial (CFG): [EARNINGS] Earned 96 cents per share for its latest quarter, 2 cents a share above estimates. Revenues in line with expectations. Citizens also announced a 19 percent increase in its quarterly dividend.
Chevron (CVX): [UPGRADE] UBS raised its rating on the energy producer to “buy” from “neutral,” saying the recent pullback in oil prices has prompted a buying opportunity for Chevron shares.
MGM Resorts (MGM): [NEWS] MGM struck a deal to give a board seat to Keith Meister, the founder of hedge fund Corvex Management.
PPG Industries (PPG): [NEWS] PPG will not face a challenge from Trian Fund Management at the paint and coatings producer’s annual shareholder meeting, according to sources quoted by Reuters.
JPMorgan Chase (JPM): [NEWS] CEO Jamie Dimon was awarded a five percent raise in compensation for 2018 to a total of $31 million, according to an SEC filing.
Interpublic Group (IPG): [NEWS] Interpublic was downgraded to “sector perform” from “outperform” at RBC Capital, which is projecting a deceleration in organic growth for the advertising firm in 2019.
GAINERS: KNX, COUP, FAST, PPG, FDC, GS, BAC, SCHW, CMA