Wall Street is setting up for a mixed open as investors digest developments in the US-China trade dispute paired with sharp declines in the British sterling as UK Brexit Secretary Dominic Raab resigned from his position, piling pressure on UK Prime Minister Theresa May – US pre-market futures higher into the opening bell.
Wednesday’s session saw the S&P 500 notching a fifth straight day of losses, chalking up its longest losing streak in nearly three weeks and now red for the month of November as financial stocks were hit by fears of tightening regulations on the Banking sector (-1.9%).
The S&P 500 ended negative -0.68%, led lower by Financials (-1.35%), which typically benefit from a rising interest rate environment, negative amid a drop in Treasury yields. Utilities were also down -1%, the second-worst market performer; dragged lower by Pacific Gas and Electric (PCG) and Edison International (EIX), two companies that serve areas in California affected by two separate wildfires.
The Nasdaq and Dow both fell short, negative -0.76% and -0.8% respectively.
US investors will be keeping a close watch on today’s slew of economic data. At 8:30am ET; Weekly Jobless Claims, Retail Sales, Export and Import data, NY Empire State Manufacturing and Philly Fed Manufacturing data are all scheduled for release; followed by Crude Oil Inventories at 11:00am EST.
On the earnings front; Walmart (WMT) and JC Penny (JCP) are due to report before the bell, while Nvidia (NVDA) and Nordstrom (JWN) are expected to report after the bell.
TODAY’S TOP HEADLINES:
United Kingdom: Sterling plunges as key ministers quit in protest at Brexit deal. (CNBC)
Sterling plunged by over 1 percent against the dollar Thursday morning after U.K. Brexit Secretary Dominic Raab resigned from his post. On Wednesday, May said she had obtained enough support from her senior ministers for her draft Brexit deal to move forward. This came after she also received support from officials at the EU earlier in the week.
Energy, Oil & Saudi Arabia: Saudi public prosecutor seeks death penalty in Khashoggi murder case. (CNBC)
Saudi Arabia’s public prosecutor said on Thursday he was seeking the death penalty for five out of 11 suspects charged in the murder of prominent journalist Jamal Khashoggi.
China & Trade: China Outlines Possible Trade Concessions to US Before G20, Sources Say. (Bloomberg)
Chinese officials have outlined a series of potential concessions to the Trump administration for the first time since the summer as they continue to try to resolve a trade war, according to three people familiar with the discussions.
The commitments for now fall short of the type of major structural reforms that President Donald Trump has been demanding, two of the people said, cautioning that a long road lies ahead in negotiations. One person said that talks between the world’s two largest economies are continuing and constructive.
08:30AM – Weekly Jobless Claims (11/10) (Previous: 214.000)
08:30AM – Core Retail Sales (MoM) (Oct) (Previous: -0.1%)
08:30AM – Retail Sales (MoM) (Oct) (Previous: 0.1%)
08:30AM – Export Price Index (MoM) (Oct) (Previous: -0.2%)
08:30AM – Import Price Index (MoM) (Oct) (Previous: 0.5%)
08:30AM – NY Empire State Manufacturing Index (Nov) (Previous: 21.10)
08:30AM – Philadelphia Fed Manufacturing Index (Nov) (Previous: 22.2)
10:00AM – Business Inventories (MoM) (Sep) (Previous: 0.5%)
11:00AM – Crude Oil Inventories (Previous: 5.783M)
STOCKS IN THE SPOTLIGHT:
Walmart (WMT): [EARNINGS] Reported third-quarter profits 7 cents a share better than Wall Street expected. Revenue fell short of estimates. Walmart raised its full-year forecast for earnings and same-store sales, citing confidence in the coming holiday season.
Cisco Systems (CSCO): [EARNINGS] Reported better-than-expected earnings of 75 cents a share, up 23 per cent from the same period the year before, and higher than the average analyst estimate of 72 cents. Net income was $3.5bn, as operating expenses fell 7 per cent. Revenue best estimates.
Oracle (ORCL): [NEWS] Berkshire Hathaway reported a 41.4 million share stake of the computing giant as of the end of September, according to a regulatory filing with the Securities and Exchange Commission. Oracle represents one of just two major tech stakes Berkshire holds, including iPhone maker Apple.
J.P. Morgan Chase (JPM): [NEWS] Berkshire Hathaway revealed a new position in J.P. Morgan Chase in its third-quarter 13-F filing. The “Oracle of Omaha” is now very much long the US banking system, with 35 million shares of JPM stock with a value of $4 billion.
Ford (F): [NEWS] Ford is road-testing autonomous vehicles in Miami, Florida, in a partnership which the automaker hopes will help it capitalize on the ride-share and business delivery sectors.
American Airlines (AAL): [NEWS] Said it was “unaware” of some functions of an anti-stall system on Boeing’s (BA) 737 MAX until last week.
LOSERS: CARG, PGR, CF, M, TRU
Bain Capital Specialty Finance (BCSF)
(Low: 20.25, High: 21.25) (Shares: 7.5M)
Boxwood Merger (BWMCU)
(Price: 10) (Shares: 25M)
Centrexion Therapeutics (CNTX)
(Low: 14, High: 16) (Shares: 5M)
(Low: 9, High: 11) (Shares: 4.5M)
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