US equity index futures were positive heading into Wednesday’s mid-week session, despite Boeing (BA) shares continuing to bare weight on US stocks, while investors look to monitor the latest details surrounding the UK’s departure from the European Union.
Indices on Tuesday finished mostly higher, with the exception of the Dow Jones, after Boeing (BA: -6.15%) shares suffered another leg-down, recording the aircraft manufacturer’s biggest two-day decline in nearly 10 years after the European Union became the latest aviation authority to ground the aerospace giant’s 737 MAX 8 jet following Sunday’s deadly Ethiopian Airlines crash.
Meanwhile, the S&P 500 and Nasdaq Composite were both elevated from this pressure and were able to post substantial gains, positive +0.38%, and +0.55%, respectively.
Across the Atlantic, at 3:00pm EST yesterday, UK Prime Minister, Theresa May, suffered another humiliating Parliamentary defeat after, her Brexit agreement was rejected by 149 votes.
The deal, which would have seen the UK exit the European Union with broad agreements on trade and future political ties, now raises both the risk of a “hard Brexit” on March 29 and the chances of either a second referendum or a general election in the coming months.
Following the Parliamentary vote, US stocks searched for direction, although ended the day roughly where they started, prior to the news.
Coming up, Producer Price Inflation data for February, as well as US durable goods orders for January will be released at 8:30am EST, followed by a weekly Oil Inventory report at 10:30am EST.
In corporate news; Tailored Brands (TLRD), Vera Bradley (VRA), Williams-Sonoma (WSM) and Cloudera (CLDR) are amongst the major companies expected to release their financials today.
TODAY’S TOP HEADLINES
Brexit: British Politics Enters the Meltdown Phase. (Bloomberg)
Theresa May promised lawmakers as many as three votes on Brexit this week, but it was the first that counted most. On Tuesday, MPs used it to deliver a second defeat to her Brexit agreement. The margin was narrower this time: The government lost by 230 votes in January and by 149 the second time. But no still means no.
ECONOMIC CALENDAR
Today’s Economical Announcements
08:30AM – ★★☆ – Cap Goods Non Defense (MoM) (Previous: 0.0%)
08:30AM – ★★★ – C. Dur. Goods (MoM) (Jan) (Previous: 0.1%)
08:30AM – ★★☆ – Dur. Goods (MoM) (Jan) (Previous: 1.2%)
08:30AM – ★★☆ – C. PPI (MoM) (Feb) (Previous: 0.3%)
08:30AM – ★★☆ – C. PPI (YoY) (Feb) (Previous: 2.6%)
08:30AM – ★★★ – PPI (MoM) (Feb) (Previous: -0.1%)
08:30AM – ★★☆ – PPI (YoY) (Feb) (Previous: 2.0%)
10:30AM – ★★★ – Crude Oil Inventories (Previous: 7.069M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks:
Express (EXPR): [EARNINGS] Earned an adjusted 19 cents per share for its latest quarter, 3 cents a share above estimates. Revenue below forecasts. Express called its performance “disappointing” and said it faces more short-term challenges.
Rite Aid (RAD): [NEWS] Chief Executive Officer John Standley will leave that job once a successor is appointed. Chief Financial Officer Darren Karst and Chief Operating Officer Kermit Crawford are also leaving the drugstore chain. Rite Aid also announced it was cutting about 400 corporate positions in a move that it says will save about $55 million per year.
Boeing (BA): [NEWS] After falling more than 11 percent over the past two sessions, some US lawmakers are calling for the Federal Aviation Administration to ground the 737 Max jets after their involvement in two overseas air crashes, but the agency maintains that the jet is airworthy. Boeing has now released details of a software update for the jet, which has been in the works for several months and predates those crashes.
Carnival (CCL): [UPGRADE] Upgraded to “buy” from “neutral” at Goldman Sachs, which cites upbeat growth figures for the cruise line operator.
CVS Health (CVS): [RATING] Rated “outperform” in new coverage at Bernstein, which said the current price doesn’t reflect the solid managed care organization business of its recently acquired Aetna unit and that threats to profit margins are already reflected.
Spotify (SPOT): [NEWS] Spotify filed a European Union complaint against Apple (AAPL), saying Apple unfairly abused its dominance of its app store to favor Apple Music over Spotify. Separately, announced an expansion of its partnership with Samsung, with Spotify being pre-installed on new Samsung devices and customers eligible for six months of Spotify Premium.
Kraft Heinz (KHC): [NEWS] Kraft Heinz is considering a sale of its Breakstone business, known for its cottage cheese and sour cream products, according to people familiar with the situation who spoke to CNBC. The unit is said to be worthy roughly $400 million.
Tesla (TSLA): [NEWS] The Securities and Exchange Commission has received permission from a federal judge to respond to Tesla CEO Elon Musk’s defense of his tweet involving production levels. The SEC had asked that Musk be held in contempt of court for that tweet, which it claims violated terms of a settlement between the two parties.
Goldman Sachs (GS): [NEWS] Goldman is opening its special situations group to outside investors, according to The Wall Street Journal. The profitable group has been investing Goldman’s own money in Asian property, troubled U.S. retailers, and other ventures.
Sanderson Farms (SAFM): [UPGRADE] JPMorgan Chase upgraded the poultry producer to “neutral” from “underperform” pointing to recent outperformance by the stock, higher chicken prices, and the prospect of China opening its markets to U.S. poultry products.
MOMENTUM STOCKS
GAINERS: MYGN, NVTA, SMAR, TTD, CFX, BERY, IONS, COST
LOSERS: DKS, HTGC, WYND
TODAY’S IPOs
None.