US equity futures and European stocks both climbed higher on Thursday, tracking an overnight rally in Asia, on news that top American and Chinese officials will resume trade talks next month.
The two countries announced that deputy-level officials would work together on preliminary talks this month, with high level talks scheduled early-October, in Washington.
Beijing has since said that hopes for “substantive progress” during these upcoming talks, after the world’s two largest economies had moved to impose further tariffs on each other.
Meanwhile, overseas in the United Kingdom, the pound added to Wednesday’s rally following the UK Parliament’s recent move to block both a no-deal exit from the European Union and an early British election, both having dealt blows to prime minister, Boris Johnson’s, attempts to push through a no-deal Brexit.
Today’s risk-on mood looks to help extend upon Wednesday’s advance, where Wall Street traded higher, following broad geopolitical easing across Hong Kong, the UK and Italy.
The S&P 500 ended +1.14% higher in a broad-based rally led by gains Technology (+1.71%) and Communication Services (+1.47%) sectors. The tech-heavy Nasdaq Composite rose +1.44% into the close.
Ahead, focus will likely to shift to remarks from Federal Reserve Chairman, Jerome Powell, and the latest US jobs report, both due this Friday, amid expectations for further monetary easing.
In today’s economic calendar, Thursday includes; the ADP National Employment Report for August at 8:15am EST, Weekly Jobless Claims at 8:30am EST, the PMI Services Index for August at 9:45am EST, followed by Factory Orders for July and the ISM Non-Manufacturing Index for August at 10am EST and then finally Crude Oil Inventories for the week ended Aug. 30 at 10:30am EST.
In earnings news; Lululemon Athletica (LULU), Ciena (CIEN), DocuSign (DOCU), Signet Jewelers (SIG), Meredith (MDP), Crowdstrike (CRWD), Zoom Video Communications (ZM), Hovnanian Enterprises (HOV), Lands' End (LE) and PagerDuty (PD) are all expected to report today.
TODAY'S TOP HEADLINES
China & Trade: China And US to Hold Trade Talks in October as Mistrust Remains. (Bloomberg)
China and the US announced that face-to-face negotiations aimed at ending their tariff war will be held in Washington in the coming weeks, amid skepticism on both sides that any substantive progress can be made.
Brexit: UK Lawmakers Foil Johnson With Votes to Delay Brexit and Bar Snap Election. (The WSJ)
British lawmakers imposed twin defeats on Prime Minister Boris Johnson, frustrating his signature effort to take Britain out of the European Union at the end of October and thwarting his push for a quick election.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:15AM - ★★★ - ADP Nonfarm Employ. (Aug) (Previous: 156K)
08:30AM - ★☆☆ - Weekly Jobless Claims (Previous: 215K)
09:45AM - ★★☆ - Services PMI (Aug) (Previous: 50.9)
10:00AM - ★★☆ - Factory Orders (MoM) (Jul) (Previous: 0.6%)
10:00AM - ★★★ - ISM Non-Manuf. PMI (Aug) (Previous: 53.7)
11:00AM - ★★★ - Crude Oil Inventories (Previous: -10.027M)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Signet Jewelers (SIG): [EARNINGS] Reported adjusted quarterly profit of 51 cents per share, well above the 24 cents a share consensus estimate. Revenue topped forecasts, and a comparable sales drop of 1.5% was less than half the 3.1% decline forecast by analysts who were surveyed by Refinitiv.
Lands’ End (LE): [EARNINGS] Lost 9 cents per share for its latest quarter, smaller than the 19 cents a share loss that Wall Street analysts had been forecasting. Revenue beat estimates as well as same-store sales at U.S. company-operated stores jumped 7.5%.
Cloudera (CLDR): [EARNINGS] Lost an adjusted 2 cents per share for its second quarter, smaller than the 10 cents a share loss anticipated by Wall Street. The cloud software company’s revenue was also well above Street projections. Cloudera raised its fiscal 2020 revenue guidance due to higher subscription sales.
Slack Technologies (WORK): [EARNINGS] Reported an adjusted quarterly loss of 14 cents per share, smaller than the 18 cents a share loss expected by Wall Street. The workplace messaging service also saw revenue come in above analysts’ forecasts, but the shares are under pressure after Slack forecast a larger-than-expected loss for the current quarter.
Ciena (CIEN): [EARNINGS] Reported adjusted quarterly earnings of 71 cents per share, 13 cents a share above estimates. Revenue also beat Wall Street predictions, and Ciena said it is on track for substantial revenue growth and increased profitability.
Mallinckrodt (MNK): [NEWS] Has hired restructuring firms and is considering the possibility of a bankruptcy filing, according to a Bloomberg report. The drugmaker is among opioid makers that have been targeted by lawsuits.
Palo Alto Networks (PANW): [EARNINGS] Beat Street estimates by 5 cents a share, with adjusted quarterly profit of $1.47 per share. Revenue exceeded estimates, as well. The cybersecurity firm issued a fiscal 2020 profit forecast below Wall Street estimates, however, even as it sees strong demand for its cloud security business.
Match Group (MTCH): [UPGRADE] Upgraded to “buy” from “hold” at SunTrust Robinson Humphrey, which points to positive app traffic and revenue trends, among other factors.
Comcast (CMCSA): [UPGRADE] Upgraded to “outperform” from “perform” at Oppenheimer, which pointed to strength in broadband and an underestimation by Wall Street of ad revenues.
Lyft (LYFT): [RATING] Deutsche Bank initiated coverage of the ride-hailing service with a “buy” rating, saying the stock may be bottoming after hitting a record low and pointing to what it calls “robust” second-quarter results.
General Motors (GM): [NEWS] CEO Mary Barra will meet with President Donald Trump at White House today, with trade, contract talks, and fuel efficiency standards among the items said to be on the agenda. That follows criticism of GM by the president last week over the automaker’s China operations.
CVS Health (CVS): [NEWS] A Justice Department settlement that allowed CVS to complete its acquisition of insurer Aetna has been approved by US District Judge Richard Leon. The judge had been examining whether the settlement did enough to protect competition and consumers.
Twitter (TWTR): [NEWS] Temporarily turned off the ability to send tweets by text message, following some high-profile account hacks that were apparently caused by mobile security flaws.
Prudential Financial (PRU): [NEWS] Is buying online startup Assurance IQ, a direct-to-consumer insurance platform, for $2.35 billion.
T-Mobile US (TMUS): [NEWS] Was sued by New York City, which accuses the mobile carrier of engaging in “rampant sales abuse” of customers of its lower priced Metro brand.
MOMENTUM STOCKS
GAINERS: INMD, BOX, AMAG, ROKU, SHAK, AMT, SO, BLMN
DECLINERS: AERI, TSN, IIPR, JBLU, ACAD
TODAY'S IPOs
None.
