Global stocks tracked notably lower into the early hours of Monday morning; startled by China’s retaliation against US President, Donald Trump’s, threat to impose further tariffs on Chinese goods by depreciating the republic’s own yuan currency to its lowest levels against the dollar in more than a decade, while simultaneously instructing state-owned companies to suspend purchases of US agricultural products.
The People's Bank of China, let the so-called on-shore yuan fall past a crucial threshold of 7 on Monday, citing "unilateralism and protectionism” in a statement issued by the country's central bank, as it depreciated the Chinese currency across international markets, theoretically making Chinese exports more attractive by offsetting the impact of tariffs.
Trump had previously criticized the Asian nation for allegedly manipulating the yuan for competitive advantage in exports. All focus will now turn to the president and his administration for a response.
These escalations look to extend upon last week’s declines, where the S&P recorded its steepest weekly drop since December, as a clouded outlook for interest rates and trade disputes between Washington and Beijing flocked investors towards haven assets.
The S&P 500, ended Friday’s session down -0.75%, its fifth consecutive fall for the equities benchmark and steepest weekly decline since December, having lost -3.11% of its value.
Ahead, aside from trade developments, in today’s economic calendar, Monday includes; a Services PMI figure for July at 9:45am EST, followed by the ISM Non-Manufacturing Index for July at 10am EST.
In corporate news; Caesars Entertainment (CZR), Tyson Foods (TSN), Take-Two Interactive Software (TTWO), Shake Shack (SHAK), Marriott International (MAR), Avis Budget Group (CAR), Cars.com (CARS), KLA (KLAC), Tenet Healthcare (THC), ON Semiconductor (ON) and Diamond Offshore Drilling (DO) are all expected to report their earnings today.
TODAY'S TOP HEADLINES
China & Trade: China Hits Back at Trump by Weakening Yuan, Halting Crop Imports. (Bloomberg)
China responded to Donald Trump’s tariff threat with another escalation of the trade war on Monday, letting the yuan tumble to the weakest level in more than a decade and asking state-owned companies to suspend imports of US agricultural products.
ECONOMIC CALENDAR
Today's Economical Announcements.
09:45AM - ★★☆ - Services PMI (Jul) (Previous: 52.2)
10:00AM - ★★★ - ISM Non-Manuf. PMI (Jul) (Previous: 55.1)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Sohu.com (SOHU): [EARNINGS] Reported an adjusted second quarter loss of $1.27 per share, wider than the loss of $1.11 per share anticipated by Wall Street analysts. The China-based internet firm also saw revenue come in below forecasts, with a drop in brand advertising revenue pressuring results.
Alibaba (BABA): [RATING] Jefferies began coverage on the China-based online retailer with a “buy” rating, noting dominant leadership and execution. The firm also said Alibaba will benefit in the short term from seasonal trends.
Facebook (FB): [NEWS] Plans to rebrand both Instagram and WhatsApp to make it clearer that they are Facebook-owned products, according to a CNET report.
Dollar Tree (DLTR): [DOWNGRADE] Deutsche Bank downgraded the discount retailer to “hold” from “buy,” saying the risk/reward profile is now balanced and noting renewed concerns about the impact of tariffs.
Uber Technologies (UBER): [NEWS] Is unlikely to be successful in its attempt to get a new five-year license from London’s transport regulator, according to a Sky News report.
JPMorgan Chase (JPM): [NEWS] Will lead an upcoming debt offering by The We Company, parent of workspace provider WeWork. Reuters reports that this puts JPMorgan in position to lead an initial public offering for WeWork later this year.
Tyson Foods (TSN): [EARNINGS] Earned an adjusted $1.47 per share for its fiscal third quarter, 5 cents a share above estimates. Revenue was below forecasts, however, under pressure during the quarter due to increased hog costs. Poultry results were mixed, but Tyson did see strength in beef and prepared foods.
Target (TGT): [UPGRADE] Upgraded to “buy” from “hold” at Deutsche Bank, which said Target is on a profitable growth pace that can be sustained and that the stock is attractively valued.
Fox Corp. (FOXA): [NEWS] Will buy online finance broker Credible Labs for $397 million in cash, as the broadcasting company searches for new sources of growth after selling film and TV assets to Walt Disney earlier this year.
Berkshire Hathaway (BRK.A): [EARNINGS] Reported quarterly profit of $2.50 per share, missing consensus estimates by 8 cents a share. Warren Buffett’s company also saw revenue fall below forecasts.
MOMENTUM STOCKS
GAINERS: PINS, SVMK, CHRS, MTZ, NWL, CORT, BLDR, HMSY, XPO
DECLINERS: FLR, NTAP, XENT, ETSY, ANET, DELL, CRC, NSTG, INSM
TODAY'S IPOs
AMTD International (HKIB) (Price: 8.38) (Est. Vol: $174.0M)
