Global equities have retreated for a second consecutive session on Tuesday, pulling US pre-market equity futures firmly into the red, following a long holiday weekend, as investors react to warnings surrounding global economic growth and ongoing uncertainty leading into Britain’s looming exit from the European Union.
Futures contracts extended losses after Chinese official data, released yesterday, indicated that China’s economy had grown at its slowest pace in nearly three decades last year.
Domestic demand and export growth suffered from government moves to crack down on pollution with tighter rules on building and emissions, paired with the ongoing trade war, which had a knock-on effect through global supply chains.
Investor sentiment was further soured, just hours later, after the International Monetary Fund Managing Director, Christine Lagarde, said risks to the global economy are rising after it cut its forecast to 3.5% this year, the weakest in three years due to softening demand across Europe and volatility in financial markets.
Still, despite this, the US stock market has been resilient; equities having gained in 10 of the first 13 sessions this year, as Federal Reserve Chairman Jerome Powell signaled a more dovish stance and on expectations of a positive outcome from the trade talks. The S&P 500 has rallied almost +14% since hitting the brink of a bear market on Christmas Eve.
It was optimism of trade talk progress between the US and China and thumping performance from American banks, a response to financial quarterly earnings, that helped Wall Street continue its strong January run – the market securing its fourth straight week of gains.
The S&P 500 rose +1.3% on Friday, its second-best advance so far this year, taking the benchmark’s weekly gain to +2.9%, its longest weekly winning streak since early August.
The benchmark’s leading Financial sector, finished the week up, +6.1% higher, its biggest weekly gain since November 2011, as investors cheered results from Goldman Sachs and Bank of America.
The Dow Jones Industrial Average finished +1.3% higher on Friday, while the Nasdaq Composite advanced +1%.
In today’s corporate data front, investors will look to swing focus onto a busy week of earnings, with no fewer than 60 S&P 500 companies set to report.
55 S&P 500 companies have reported quarterly earnings for far this year, with 76.4% topping analysts’ profit estimates, well above the long-term average of 64%, according to Refinitiv.
Amongst the long list of today’s earnings; JNJ, SWK, ATI, ONB, FITB, HAL, UTX, FNB, STLD, PETS, EDU, PLD and ROL are expected to post their latest financial figures before the opening bell.
Followed by; IBM, AMTD, ARAY, HOPE, ZION, COF and NAVI set to post their earnings after market close.
TODAY’S TOP HEADLINES:
Brexit: Labour Calls For Vote That Could Spark Second Brexit Referendum. (Bloomberg)
The UK’s main opposition party is backing a plan that could open the door to a second European Union referendum, bringing the possibility of stopping Brexit a step closer.
Politics: Senate to Weigh Trump’s Proposal to End Shutdown, With Passage Unlikely. (The WSJ)
The Senate this week is expected to vote on a border-security proposal put forward by President Trump that is unlikely to garner enough support to cross procedural hurdles, leaving no clear path forward as the partial government shutdown stretches into its fifth week.
Today’s Economical Announcements
08:55AM – ★☆☆ – Redbook (YoY) (Previous: 6.7%)
08:55AM – ★☆☆ – Redbook (MoM) (Previous: -1.7%)
10:00AM – ★★★ – Existing Home Sales (Dec) (Previous: 5.32M)
10:00AM – ★★☆ – Existing Home Sales (MoM) (Dec) (Previous: 1.9%)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Stanley Black & Decker (SWK): [EARNINGS] Earned an adjusted $2.11 per share for the fourth quarter, a penny a share above estimates. Revenue also beat forecasts.
Under Armour (UAA): [UPGRADE] Goldman Sachs upgraded the athletic apparel maker’s shares to “buy” from “neutral” and added the stock to its “Conviction Buy” list.
UBS (UBS): [EARNINGS] Missed analysts’ estimates for its fourth quarter, also warned of a tough start to 2019 due to trade disputes and unresolved geopolitical tensions.
Alphabet (GOOGL): [NEWS] Alphabet’s Google unit was fined about $57 million, the biggest so far under a new European privacy law. Google was accused of not going far enough in gathering user consent for data use.
Apple (AAPL): [NEWS] Apple supplier Foxconn said it trying to hire more than 50,000 people for the January through March quarter. That’s in contrast to reports that the contract manufacturer was in the midst of mass layoffs due to slowing iPhone sales.
Johnson & Johnson (JNJ): [EARNINGS] Earned an adjusted $1.97 per share for the fourth quarter, 2 cents a share above estimates. Revenue also topped forecasts.
Travelers (TRV): [EARNINGS] Reported adjusted quarterly profit of $2.13 per share for the fourth quarter, compared to the consensus estimate of $2.05 a share.
Nike (NKE): [UPGRADE] Cowen upgraded Nike to “outperform” from “market perform,” saying the athletic footwear and apparel maker will see multiyear increases in gross margins on a favorable product cycle.
Take-Two Interactive (TTWO): [RATING] Deutsche Bank began coverage of the videogame maker with a “buy” rating, saying it foresees a higher growth rate for Take-Two than it does for rivals Activision Blizzard and Electronic Arts.
Amazon.com (AMZN): [NEWS] Launched direct sales of merchandise in Brazil after months of delays as it worked around a variety of logistical issues.
Tesla (TSLA): [NEWS] Tesla’s Model 3 has been approved by European regulators, clearing the way for the expected European introduction of the electric vehicle next month.
FedEx (FDX): [NEWS] Will take a charge of as much as $575 million for voluntary buyouts, as it trims its employee ranks to reduce expenses.
Apollo Global Management (APO): [NEWS] The private-equity firm is close to a deal to acquire European packaging company RPC Group for more than $3.8 billion, according to The Wall Street Journal.
GAINERS: OZK, COUP, FAST, FDC, GS, BAC, SCHW, CMA