At the end of a distasteful week in which escalating trade tensions overwhelmed the market, things looked a little sweeter into the early hours of this morning, following supportive words on trade overnight from President Donald Trump.
Note: All major US financial markets will be closed on Monday, May 27, in light of Memorial Day.
On Thursday afternoon, Trump signaled to White House reporters that a trade deal with China could lift restrictions on the Chinese telecom giant Huawei, stating; “If we made a deal, I can imagine Huawei being included in some form or some part of a trade deal”.
He had also predicted a swift end to ongoing trade tensions, adding; “It’s happening, it’s happening fast and I think things probably are going to happen with China fast because I cannot imagine that they can be thrilled with thousands of companies leaving their shores for other places”.
Elsewhere, in the United Kingdom, UK markets inched higher after UK Prime Minister, Theresa May, announced that she would stand down; drawing an end to her turbulent three-year premiership, on June 7.
In an emotional speech outside 10 Downing Street, May said; “I believe it was right to persevere even when the odds against success seemed high, but it is now clear to me that it is in the best interests of the country for a new prime minister to lead that effort”.
These moves in pre-market follow suit to Thursday’s session where Wall Street fell sharply lower, extending a broad sell-off across global stock markets as concerns over the potential impact of a deepening trade dispute between the US and China took a tighter grip on sentiment.
The S&P 500 had declined -1.22%, with the tech-heavy Nasdaq Composite down -1.53% into the close. Sectors with the most direct exposure to the latest round of tension, particularly Technology (-1.76%), Energy (-3.35%) and Financials (-1.41%), led the declines.
Ahead, in today’s economic calendar, Friday includes; Durable Goods Orders for April at 8:30am EST.
While, in corporate news; Foot Locker (FL) and Hibbett Sports (HIBB) are amongst the major companies scheduled to report their financials today.
TODAY’S TOP HEADLINES
UK & Brexit: Tearful Theresa May Quits as Brexit Breaks Her Premiership. (Bloomberg)
An emotional Theresa May announced she will quit as Britain’s prime minister after admitting she had failed to deliver the one task that defined her time in office, taking the country out of the European Union.
Trade & China: Trump predicts ‘fast’ trade deal with China but provides no evidence. (CNBC)
US President Donald Trump on Thursday predicted a swift end to the ongoing trade war with China, although no high-level talks have been scheduled between the two countries since the last round of negotiations ended in Washington two weeks ago.
ECONOMIC CALENDAR
Today’s Economical Announcements.
08:30AM – ★★★ – C. Durable Goods (Apr) (Previous: 0.2%)
08:30AM – ★★☆ – Durable Goods (Apr) (Previous: 2.8%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Hibbett Sports (HIBB): [EARNINGS] Earned an adjusted $1.61 per share for the first quarter, 29 cents a share above estimates. The sporting goods retailer’s revenue beat estimates as well, and a comparable-store sales increase of 5.1% trounced the consensus forecast of a 1.6% rise.u
Foot Locker (FL): [EARNINGS] Reported adjusted quarterly profit of $1.53 per share, missing estimates by 7 cents a share. Revenue also came in below forecasts, and a comparable-store sales increase of 4.6% was below the 5.1% estimate of analysts surveyed by Refinitiv.
Autodesk (ADSK): [EARNINGS] Earned an adjusted 45 cents per share for the first quarter, 2 cents a share below estimates. The software maker’s revenue also missed forecasts, however its results improved over year-earlier numbers as it increased subscription revenue
HP Inc. (HPQ): [EARNINGS] Reported adjusted quarterly earnings of 53 cents per share, beating consensus estimates by 2 cents a share. The computer and printer maker’s revenue also beat Street forecasts, and it issued a current quarterly outlook roughly in line with consensus.
Constellation Brands (STZ): [DOWNGRADE] Downgraded to “equal-weight” from “overweight” at Morgan Stanley, primarily on valuation after a 36% jump from a January 9 low. Morgan Stanley also points to a potential beer demand slowdown this summer.
Ross Stores (ROST): [EARNINGS] Earned an adjusted $1.13 per share for its latest quarter, a penny a share above estimates. The discount retailer’s revenue also beat forecasts, however Ross gave weaker-than-expected current-quarter guidance as it deals with under performance in women’s apparel as well as higher freight and wage costs.
Intuit (INTU): [EARNINGS] Beat consensus estimates by 15 cents a share, with fiscal third-quarter profit of $5.55 per share. The TurboTax software maker’s revenue also came in above estimates and the company raised its full-year forecast.
Boeing (BA): [NEWS] The Federal Aviation Administration expects Boeing’s grounded 737 Max jet to be approved for a return to service as soon as late June, according to sources who spoke to Reuters.
The Buckle (BKE): [EARNINGS] Fell 4 cents a share shy of consensus forecasts with quarterly profit of 31 cents per share. Revenue was above analysts’ forecasts, however, and comparable-store sales dropped a less than expected 1.3%. Analysts had been anticipating a 2.4% decline in comp sales.
Amazon.com (AMZN): [NEWS] Amazon shares will reach $3,000 between mid-2021 and mid-2022, according to a Piper Jaffray analyst report. Piper said that this move is based on Amazon meeting what it considers conservative growth targets.
Hewlett Packard Enterprise (HPE): [EARNINGS] Came in 5 cents a share above forecasts, with adjusted quarterly profit of 42 cents per share. The business technology provider’s revenue came in short of analysts’ estimates, however, but the company raised its financial targets for the full year.
Big Lots (BIG): [DOWNGRADE] Downgraded to “neutral” from “overweight” at Piper Jaffray, which is concerned about the retailer’s exposure to tariffs on goods from China.
MOMENTUM STOCKS
GAINERS: LB, CPRT, IOVA, MDT, TGT, ARWR
DECLINERS: CRC, SCVL, PUMP, BLMN, MTDR, VRNT, SLCA, PDCE, HES
TODAY’S IPOs
Proficient Alpha Acquisition (PAACU) (Price: 10) (Est. Vol: $100.0M)