European equities eased off two-month lows overnight, yet remained on track for their biggest monthly decline of the year, amid a protracted trade dispute between the world’s two largest economies; US equity index futures trailed higher into the New York open.
The month of May has seen downturns in tech forerunners such as Nvidia (NVDA: -21%), Tesla (TSLA: -21%) and Apple (AAPL: -13%) weigh heavily on Wall Street’s -5% ‘sell May’ retreat, amid worries that Beijing’s trade reprisals could upend China-focused revenue and disrupt worldwide supply chains.
In recent updates, underscoring the progress of these disputes and ramping up the rhetoric against the United States, Chinese Vice Foreign Minister, Zhang Hanhui, had lent his voice in an effort to bolster China’s position, calling the US-China trade conflict an act of “naked economic terrorism”, as he spoke against the use of “big sticks” like trade sanctions, tariffs and protectionism to reporters in Beijing today, amid bitter negotiations that is showing no signs of ending soon.
These moves in pre-market come after yesterday’s slide in equities, where investors sought the relative safety of bonds, amid persistent trade tensions.
The S&P 500 staged a comeback to end -0.67% lower, after being down as much as -1.3%. All 11 S&P 500 sectors were in the red, with the typically higher-yielding Utilities and Real Estate sectors having led much of the declines, down -1.32% and -1.19% respectively.
Ahead, in today’s economic calendar, Thursday includes; the second estimate of first-quarter GDP at 8:30am EST, Pending Homes Sales for April at 10am EST, followed by Oil Inventories for the week ended May 24 at 11am EST.
In corporate news; Uber (UBER), Costco Wholesale (COST), Dollar General (DG), Dollar Tree (DLTR), Ulta Beauty (ULTA), Designer Brands (DBI), Dell Technologies (DELL), Gap Inc. (GPS), Marvell Technology (MRVL), VMware (VMW), Lululemon Athletica (LULU) and Zuora (ZUO) are amongst the major companies scheduled to report their latest financial results today.
TODAY’S TOP HEADLINES
China & Trade: China Puts US Soy Buying on Hold as Tariff War Escalates. (Bloomberg)
China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter.
China & Trade: China says US trade provocations are ‘naked economic terrorism’. (CNBC)
Provoking trade disputes is “naked economic terrorism”, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the United States amid a bitter trade war that is showing no signs of ending soon.
Today’s Economical Announcements.
08:30AM – ★☆☆ – Weekly Jobless Claims (Previous: 211,000)
08:30AM – ★★☆ – Goods Trade Balance (Apr) (Previous: -71.33B)
08:30AM – ★☆☆ – Wholesale Invent. (MoM) (Apr) (Previous: -0.1%)
08:30AM – ★★★ – GDP (QoQ) (Q1) (Previous: 3.2%)
10:00AM – ★★★ – P. Home Sales (MoM) (Apr) (Previous: 3.8%)
11:00AM – ★★★ – Crude Oil Inventories (Previous: 4.740M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Movado (MOV): [EARNINGS] Reported adjusted quarterly profit of 24 cents per share, 7 cents a share below estimates. Revenue also missed forecasts and Movado said the retail environment remains challenging.
PVH Corp. (PVH): [EARNINGS] Reported adjusted quarterly profit of $2.46 per share, beating estimates by a penny a share. Revenue missed estimates, however, and also cut its full-year forecast as it absorbs the impact of higher China tariffs. PVH sources the majority of its offerings from China.
Keysight Technologies (KEYS): [EARNINGS] Reported adjusted quarterly profit of $1.22 per share, beating the consensus estimate of 98 cents a share. The provider of electronics technology’s revenue came in above Street forecasts, as well, as it saw growth in 5G and automotive markets. The company also issued an upbeat forecast.
Express (EXPR): [EARNINGS] Lost 15 cents per share, lower than the 31 cents a share loss that analysts had anticipated. Revenue beat forecasts, and a same-store sales decline of 9 % was less than the 10.1% consensus forecasts of analysts polled by Refinitiv.
Palo Alto Networks (PANW): [EARNINGS] Beat estimates by 6 cents a share, with adjusted quarterly profit of $1.31 per share. Revenue also topped Wall Street forecasts; however, it gave a weaker-than-expected current-quarter forecast as acquisitions negatively impact its bottom line.
Veeva Systems (VEEV): [EARNINGS] Beat estimates by 5 cents a share, with adjusted quarterly profit of 50 cents per share. Revenue also exceeded forecasts. Veeva is a provider of cloud software for the life sciences industry.
Dollar General (DG): [EARNINGS] Earned $1.48 per share for the first quarter, 9 cents a share above estimates. Revenue came in above forecasts as well, and a same-store sales increase of 3.8% beat the Refinitiv consensus of a 2.9% rise.
Dollar Tree (DLTR): [EARNINGS] Matched Wall Street forecasts, with adjusted quarterly profit of $1.14 per share. Revenue was above forecasts, however, and the discount retailer saw same-store sales rise 2.2% compared to a consensus estimate of 2.1%.
Citigroup (C): [UPGRADE] Upgraded to “buy” from “neutral” at Goldman Sachs, which thinks the bank has a realistic path to growth in key metrics next year even without strengthening global growth or higher interest rates.
Twilio (TWLO): [NEWS] Announced a $750 million stock offering, with underwriters being given the option to sell an addition $112.5 million in shares in the cloud-computing company.
Comcast (CMCSA): [UPGRADE] Guggenheim Securities upgraded the stock to “buy” from “neutral,” noting growth in the broadband business and saying that NBCU is operating at a very high level.
Verizon (VZ): [DOWNGRADE] Downgraded to “neutral” from “buy” at UBS, based on a valuation that it feels is in line with historical trends. UBS does say that Verizon is well-positioned as a defensive investment.
Sanderson Farms (SAFM): [EARNINGS] Beat estimates by 18 cents a share, with quarterly profit of $1.83 per share. Revenue also beat consensus. Sanderson said a cold, wet spring in the U.S. has put upward pressure on prices.
Invitation Homes (INVH): [NEWS] Blackstone sold more than $1 billion in shares of the single-family home landlord, launched by Blackstone after the financial crisis. The shares are now trading near a record high amid rising rents and strong demand.
GAINERS: CARA, BYND, CY, BGS
DECLINERS: EVH, ANF, ELF, PVH, MAC, DKS, PPC, GIS, NYT, FL, STZ
GigCapital2 (GIX.U) (Price: 10) (Est. Vol: $130.0M)
Proficient Alpha Acquisition (PAACU) (Price: 10) (Est. Vol: $100.0M)