Relative stock price bargains look to magnify risk-comfort on Wall Street today, with futures on the S&P 500, Dow Industrials and Nasdaq all indicating a higher New York open.
This follows dovish comments by Federal Reserve Chairman, Jerome Powell, as investors continued to bet that any trade-related slowdown in the domestic economy will be offset by an interest rate cut from the Federal Reserve.
Powell’s comments, issued during a central bank symposium in Chicago yesterday, had triggered the US stock market’s biggest single-day gain in five months; although, investors had been primed for the rally earlier in the week when his colleague, St. Louis Fed President, James Bullard, spoke of a “darkened” global trade outlook and hinted at a policy move in response.
“We do not know how or when these issues will be resolved” Powell said in relation to ongoing trade conflicts with China, Mexico and the European Union. “We are closely monitoring the implications of these developments for the US economic outlook and, as always, we will act appropriately to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective”.
Following Jerome Powell’s signaled openness to cut interest rates if necessary, the S&P 500 rose +2.17%, the tech-heavy Nasdaq Composite jumped +2.82% and the Dow Jones Industrial Average advanced +2.07%.
These gains were dominantly led by the Technology sector (+3.34%), which had recovered following a hard-hitting Monday session; with big names like Alphabet (GOOGL: +1.52%), Facebook (FB: +2.04%), Amazon (AMZN: +2.18%), Apple (AAPL: +3.66%) and Netflix (+4.98%) all higher, which helped to pull the Nasdaq out of correction territory.
Ahead, in today’s economic calendar, Wednesday includes; the ADP National Employment Report for May at 8:15am EST, the PMI Services Index for May at 9:45am EST, the ISM Non-Manufacturing Index for May at 10am EST, followed by Oil Inventories for the week ended May 31 at 10:30am EST.
In corporate news; Five Below (FIVE), American Eagle Outfitters (AEO), G-III Apparel Group (GIII), Campbell Soup (CPB), Cloudera (CLDR), Stitch Fix (SFIX), MongoDB (MDB) and United Natural Foods (UNFI) are amongst the long list of major companies scheduled to report their financials today.
TODAY’S TOP HEADLINES
Iran & Politics: President Trump Says There’s `Always a Chance’ of War With Iran. (Bloomberg)
President Donald Trump said there’s “always a chance” of the US taking military action in Iran, though he’d prefer to engage verbally with Iranian President Hassan Rouhani.
Today’s Economical Announcements.
08:15AM – ★★★ – Nonfarm Employment (May) (Previous: 275K)
09:45AM – ★★☆ – Services PMI (May) (Previous: 50.9)
10:00AM – ★★★ – ISM Non-Manuf. PMI (May) (Previous: 55.5)
10:30AM – ★★★ – Crude Oil Inventories (Previous: -0.282M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Pivotal Software (PVTL): [EARNINGS] Reported an adjusted loss of 3 cents per share, 2 cents a share smaller than expected. The applications software provider’s revenue exceeded estimates, however Pivotal gave a lower-than-expected sales forecast for the full year on issues involving sales execution and what it calls a “complex technology landscape.”
GameStop (GME): [EARNINGS] Beat estimates by 4 cents a share, with adjusted quarterly profit of 7 cents per share. The videogame retailer’s revenue missed forecasts and its comparable-store sales fell a larger-than-expected 10.3%. GameStop also eliminated its quarterly dividend in an effort to strengthen its balance sheet.
Ambarella (AMBA): [EARNINGS] Earned an adjusted 1 cent per share for its latest quarter, compared to the consensus forecasts of a 5 cents per share loss. The chip maker’s revenue also beat estimates, and it gave stronger-than-expected current quarter revenue guidance despite falling orders from China.
Cronos (CRON): [UPGRADE] Bank of America upgraded the cannabis producer’s stock two levels, to “buy” from “underperform,” based on the prospects for US expansion.
Campbell Soup (CPB): [EARNINGS] Reported adjusted quarterly profit of 56 cents per share, 9 cents a share above estimates. Revenue also beat Wall Street forecasts and the food producer increased its full-year outlook.
Salesforce.com (CRM): [EARNINGS] Reported adjusted quarterly earnings of 93 cents per share, well above the consensus estimate of 61 cents a share. The enterprise software company’s revenue topped forecasts as well. Salesforce also gave a better-than-expected full-year outlook, as companies seek to lower costs by shifting to cloud-based platforms.
Roku (ROKU): [UPGRADE] Upgraded to “buy” from “neutral” at Guggenheim Securities, based on faster growth in video advertising as well as other metrics.
Apple (AAPL): [NEWS] Apple will ask developers to put its new “sign on with Apple” button in apps above rival buttons from Alphabet’s Google (GOOGL) and Facebook (FB), according to a Reuters report. Separately, CEO Tim Cook told CBS News China has not targeted the company as a result of the U.S.-China trade dispute, and he does not anticipate that will happen.
TiVo (TIVO): [NEWS] Said an International Trade Commission judge had ruled that the company had violated some of its patents.
3M (MMM): [NEWS] Sold its gas and flame detection business to instrumentation technology company Teledyne Technologies (TDY) for $230 million.
Skyworks Solutions (SWKS): [OUTLOOK] Cut its financial outlook, reflecting the chipmaker’s concerns over government sanctions against China’s Huawei. Sales to Huawei represented 12% of total revenue for the first half of the current fiscal year.
Fiat Chrysler (FCAU): [NEWS] Fiat Chrysler’s bid to buy French automaker Renault will be discussed by the Renault board once again today, after the board said it needed more time to weigh the proposal.
LabCorp (LH): [NEWS] LabCorp said 7.7 million of its customers may have been impacted by the same data breach that affected rival medical lab operator Quest Diagnostics.
GAINERS: TTD, SNAP MRTX, DG
DECLINERS: MGNX, VTR, WCN