American equity futures tracked higher this morning, as shares of General Electric (GE) and Apple (AAPL) advanced post-earnings, ahead of a Federal Reserve policy decision at 2pm EST, where the central bank is expected to cut interest rates.
Donald Trump stepped up his pressure on the Fed leading up to their announcement, saying in a tweet; "a small rate cut is not enough". He has repeatedly called for the "incompetent" Fed to slash official US interest rates, a step typically only taken when growth is faltering.
Today’s highly anticipated Fed event, comes after Tuesday’s session, where US stocks declined after Donald Trump criticized China’s handling of key trade talks between the two countries.
He had tweeted that there were “no signs” China had started buying US agricultural products as promised. “That is the problem with China, they just don’t come through,” he wrote, as American delegates wrapped up two-day negotiations with their Chinese counterparts in Shanghai.
The S&P 500 ended down -0.24%, clawing back some of its losses after sliding -0.70% lower earlier in the session - following profit taking in Utility (-0.76%), Technology (-0.64%) and Consumer Discretionary (-0.68%) sectors, which offset buying in Energy (+1.13%) amid a rally in oil prices.
Meanwhile, the tech-heavy Nasdaq Composite ticked -0.43% lower, while the Dow Jones Industrial Average fell -0.08% despite a strong day for Procter & Gamble (PG: +3.80%).
Aside from an interest rate decision, today’s economic calendar also includes; the ADP National Employment Report at 8:15am EST, a Chicago PMI figure for July at 9:45am EST, followed by Crude Oil Inventories for the week ended July 26 at 10:30am EST.
In earnings; General Electric (GE), Qualcomm (QCOM), Humana (HUM), Spotify (SPOT), Western Digital (WDC), Fitbit (FIT), Cirrus Logic (CRUS), Molson Coors Brewing (TAP), Occidental Petroleum (OXY), Lam Research (LRCX), Zynga (ZNGA), Twilio (TWLO) and Metlife (MET) are amongst the major companies scheduled to report today.
TODAY'S TOP HEADLINES
Politics: The Fed’s credibility is at stake as it looks to cut rates under pressure from a vocal president. (CNBC)
If the Federal Reserve fulfills expectations and cuts interest rates Wednesday, it will have to convince the public it is doing so to preserve economic growth and not kowtowing to a very vocal president who is demanding looser monetary policy.
China & Trade: China Says US Trade Talks to Continue With September Meeting. (Bloomberg)
China and the US plan to meet again in September to extend trade talks, as the latest round of negotiations in Shanghai ended with signs the sides discussed Chinese purchases of American farm products, a key demand of President Donald Trump.
Today's Economical Announcements.
08:15AM - ★★★ - ADP Nonfarm Employ. (Jul) (Previous: 102K)
09:45AM - ★★☆ - Chicago PMI (Jul) (Previous: 49.7)
10:30AM - ★★★ - Crude Oil Inventories (Previous: -10.835)
02:00PM - ★★★ - Fed Interest Rate Decision (Previous: 2.50%)
02:30PM - ★★★ - FOMC Press Conference
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
FireEye (FEYE): [EARNINGS] Lost 1 cent per share for the second quarter, surprising analysts who had expected a 1 cent per share profit for the cybersecurity firm. Revenue came in above estimates, but operating expenses were up more than 7%. The company cut its full-year guidance, as it continues its transition to a subscription-based model.
Garmin (GRMN): [EARNINGS] Beat estimates by 15 cents a share, with adjusted quarterly profit of $1.16 per share. Revenue also beat forecasts, and Garmin raised its full-year earnings and sales guidance amid improvement in all four of its segments.
Molson Coors (Tap): [EARNINGS] Fell 13 cents a share short of estimates, with adjusted quarterly profit of $1.52 per share. Revenue also missed Wall Street forecasts, hurt by unfavorable weather and weak industry demand.
Electronic Arts (EA): [EARNINGS] Reported adjusted quarterly profit of 19 cents per share, compared to a consensus estimate of 1 cent per share. The video game publisher’s revenue also came in above Street forecasts. EA got a boost from the success of its “Apex Legends” game, which helped drive a nearly 20% increase in revenue from the company’s live services.
Apple (AAPL): [EARNINGS] Reported quarterly profit of $2.18 per share, 8 cents a share above estimate. Revenue beat forecasts as well. The better-than-expected results came despite a 12% decline in iPhone sales during the quarter.
Humana (HUM): [EARNINGS] Earned an adjusted $6.05 per share for its latest quarter, beating the consensus estimate of $5.31 a share. Revenue also topped forecasts, and Humana raised its full-year earnings guidance on strength in its Medicare Advantage health plan business. Separately, the company announced it will buy back $1 billion in stock from a third-party financial institution.
Carlyle Group (CG): [NEWS] Announced it would convert from a publicly traded partnership to a C-corporation effective January 1. It’s the latest PE firm to do so, following rivals like Blackstone, KKR, and Apollo.
Advanced Micro Devices (AMD): [EARNINGS] Reported in-line profit of an adjusted 8 cents per share for its second quarter, with the chip maker’s revenue essentially in line. AMD warned, however, that third-quarter revenue would be below analysts’ projections as gaming console chip demand falls.
ADP (ADP): [EARNINGS] Beat forecasts by a penny a share, with adjusted quarterly profit of $1.14 per share. Revenue also exceeded analysts’ estimates.
General Electric (GE): [EARNINGS] Reported adjusted quarterly profit of 17 cents per share, 5 cents a share above estimates. Revenue also beat forecasts, and the company boosted its full-year outlook. Separately, GE announced the impending departure of CFO Jamie Miller, who will stay on until a replacement is found.
Spotify (SPOT): [EARNINGS] Posted a wider-than-expected loss for its latest quarter, but revenue exceeded estimates. Spotify also reported a 29% jump in monthly active users and a 30% increase in premium subscribers compared to a year ago, although some subscriber metrics were below analysts’ forecasts.
Amgen (AMGN): [EARNINGS] Earned an adjusted $3.97 per share for its latest quarter, compared to a consensus estimate of $3.59 a share. The biotech giant’s revenue also came in above estimates, as sales of newer drugs helped offset a drop for its older treatments that have gone off patent.
Gilead Sciences (GILD): [EARNINGS] Beat estimates by 10 cents a share, with adjusted quarterly profit of $1.82 per share. Revenue also came in above estimates. The drugmaker’s bottom line got a boost from improved sales of HIV treatments. Gilead also raised its full-year sales forecast.
Mondelez (MDLZ): [EARNINGS] Matched estimates with quarterly earnings of 57 cents per share, with the snack maker’s revenue slightly above Street forecasts. Mondelez raised its 2019 forecast for organic sales, and also announced a 10% increase in its quarterly dividend.
Yum China (YUMC): [EARNINGS] Beat estimates by 7 cents a share, with quarterly profit of 46 cents per share. The restaurant operators revenue was slightly below forecasts, however, and Yum China said it expected sales growth to “moderate” going forward.
GAINERS: SLCA, TREX, ZBRA, NBIX, MLM, WAB, CGNX, FDC
DECLINERS: BERY, PFE
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