US stock futures indicated a moderately higher open on Wednesday, following reports that a trade deal between the US and China may happen soon after all.
This rebound followed a Bloomberg article which reported that US negotiators expect a phase-one deal to be completed before tariffs are set to rise on Dec. 15, despite tensions over Hong Kong and Xinjiang.
While Beijing had threatened to retaliate against US legislation, it’s unlikely to impact the talks, according to the report.
“Recent US legislation seeking to sanction Chinese officials over human-rights issues in Hong Kong and Xinjiang are unlikely to impact the talks”, the report wrote, citing an unidentified person familiar with Beijing’s thinking.
The article also mentioned President Donald Trump’s comments Tuesday, where he had downplayed the urgency of a deal, writing; it shouldn’t be understood to mean the talks were actually stalling, “he was speaking off the cuff”.
These developments come after yesterday’s session, where stocks closed lower on Tuesday, after Trump said a US-China trade agreement may have to wait until after next year's presidential elections, contradicting expectations that an agreement may be reached by the end of the year.
The S&P 500 closed -0.67% lower, following a -0.85% decline on Monday. Meanwhile, the Nasdaq Composite sank -0.78% and the Dow Jones Industrial Average fell -0.97%.
Ahead, in today’s economic calendar, Wednesday includes; November's ADP employment report at 8:15am EST, Services Purchasing Managers' Index (PMI) for November at 9:45am EST and the ISM Non-Manufacturing Index for November at 10am EST.
In earnings; RH (RH), Slack Technologies (WORK), Campbell Soup (CPB), At Home Group (HOME) and H&R Block (HRB) are all expected to report today.
TODAY'S TOP HEADLINES
China & Trade: US, China Move Closer to Trade Deal Despite Harsh Rhetoric. (Bloomberg)
The US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:15AM - ★★★ - ADP Nonfarm Employ. (Nov) (Previous: 125K)
09:45AM - ★★☆ - Services PMI (Nov) (Previous: 50.6)
10:00AM - ★★★ - ISM Non-Manuf. PMI (Nov) (Previous: 54.7)
10:30AM - ★★★ - Crude Oil Inventories (Previous: 1.572M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Workday (WDAY): [EARNINGS] Beat estimates by 15 cents a share, with quarterly profit of 53 cents per share. The human resources software company’s revenue also came in above estimates and Workday raised its full-year forecast as more companies sign up for subscriptions. The company gave a weaker-than-expected outlook for next year, however.
GoPro (GPRO): [NEWS] Said its new Hero8 camera saw record sales as the holiday season kicked off. CEO Nick Woodman said the strong holiday season start positions the company well to report a profit this year and increase sales and profits in 2020.
Campbell Soup (CPB): [EARNINGS] Reported a better-than-expected quarterly profit, although sales were slightly below expectation as organic sales fell by 1%. The company saw an increase in its share of the soup market for the first time in 10 quarters.
Mastercard (MA): [DIVIDEND] Announced a 21% increase in its quarterly dividend, to 40 cents a share from the prior 33 cents a share. It also announced a new $8 billion share repurchase program.
Johnson & Johnson (JNJ): [NEWS] Said new tests had shown that its Johnson’s Baby Powder product contained no asbestos. The Food and Drug Administration had said earlier this year that investigations had found trace amounts in the product. The new tests were conducted by two different third-party laboratories.
Alphabet (GOOGL): [NEWS] Announced that co-founder Larry Page would step down as CEO, replaced by the CEO of its Google unit, Sundar Pichai. The company’s other co-founder, Sergey Brin, will give up his title as president, although both Brin and Page will remain on the board of directors.
Salesforce.com (CRM): [EARNINGS] Reported quarterly earnings of 75 cents per share, beating the consensus estimate of 66 cents a share. The business software provider’s revenue exceeded forecasts as well. Salesforce is seeing demand rise as more businesses move to the cloud. The company also issued a 2020 profit forecast above the Street’s outlook.
Qualcomm (QCOM): [NEWS] Will appeal a South Korean High Court decision to uphold a record $873 million fine against the chipmaker. The fine had been imposed for allegedly unfair business practices.
Boeing (BA): [NEWS] United Airlines (UAL) announced a new 50-jet order for Airbus A321XLR jets to fly between the US East Coast and Europe. Those jets will replace the airline’s 53 Boeing 757-200 jets beginning in 2024.
Constellation Brands (STZ): [NEWS] Sold its Ballast Point craft beer unit to Illinois-based Kings & Convicts Brewing for an undisclosed amount. Constellation had bought Ballast Point in 2015 for $1 billion, still a record sale price for a craft brewery.
MOMENTUM STOCKS
GAINERS: APLS, IOVA, REGI
DECLINERS: CARA, INMD, TROX, BHF, OLLI
TODAY'S IPOs
None.
