Stock-index futures point to a slightly lower open ahead of Friday’s session as investors look to avoid snapping the major benchmarks’ five-day winning streak fuelled by dovish remarks from the Federal Reserve paired with wide-spread hope of a breakthrough on trade.
US and Chinese officials are reportedly working on arrangements of high-level trade talks, after mid-level officials concluded talks earlier this week. US Treasury Secretary Steven Mnuchin announced, Thursday, that Vice Premier Liu would likely visit Washington later in January for further negotiations.
After fluctuating between losses and gains all day yesterday, the S&P finished +0.35% higher; leveraging advances in Real Estate (+1.38%), Industrial (+1.36%) and Utility (+1.31%) sectors, whose strength was offset by a sell-off in Retailers (M: -17%), (KSS: -5%) and (LB: -4.3%) following their latest batch of holiday-season earnings reports. Consumer Discretionary being the only S&P sector to finish the day in the red, down -0.29%.
The Dow Jones Industrial Average rose +0.45% for its fifth day of gains and longest winning streak since October. Meanwhile, the Nasdaq Composite ended the session positive +0.29%.
Midday trading saw remarks by Powell add choppiness to the markets; the Fed chair set off some alarm bells, stating; the US central bank would continue shrinking its balance sheet to a more normal level. He also warned a prolonged government shutdown could hurt the US economy as it neared the end of its third week.
On today’s data front, investors are likely to closely monitor the latest CPI figures as well as core CPI data for December at 8:30am ET.
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TODAY’S TOP HEADLINES:
Brexit: A crunch Brexit vote is coming that could trigger even more political chaos. (CNBC)
British lawmakers are set to vote on Prime Minister Theresa May’s much-maligned Brexit deal on Tuesday, with less than three months to go before the UK is set to leave the European Union.
Markets & Politics: Government Shutdown Could End 99-Month Job Growth Streak. (The WSJ)
The partial government shutdown could cause the longest stretch of continuous job growth recorded in the US to come to an end this month. US employers, including private businesses and government agencies, have added jobs every month since October 2010, a streak of 99 months. That is the longest run on record dating back to 1939 and would to come to an end, if hundreds of thousands of government workers furloughed by the partial shutdown are dropped from federal payrolls.
ECONOMIC CALENDAR:
Today’s Economical Announcements
08:30AM – ★★★ – Core CPI (MoM) (Dec) (Previous: 0.2%)
08:30AM – ★★☆ – Core CPI (YoY) (Dec) (Previous: 2.2%)
08:30AM – ★☆☆ – CPI (MoM) (Dec) (Previous: 0.0%)
08:30AM – ★☆☆ – CPI (YoY) (Dec) (Previous: 2.2%)
TENTATIVE* – ★★☆ – Fed Budget Balance (Dec) (Previous: -205.0B)
*May Be Delayed by the Government Shutdown.
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Activision Blizzard (ATVI): [NEWS] Announced Thursday that it will transfer publishing rights for its Destiny franchise to Bungie. The company is also defending itself against claims from a former employee who says he was bullied while on the job.
PG&E (PCG): [DOWNGRADE] Another credit rating firm downgraded the company in the aftermath of historic wildfires that ravaged parts of the state last year.
Starbucks (SBUX): [REVIEW] Goldman Sachs predicted that the company would follow iPhone maker Apple in warning of weaker business in China.
Netflix (NFLX): [UPGRADE] Both UBS and Raymond James urged clients to buy the stock. UBS hiked its rating on the stock to “buy” from “neutral,” writing that after six months of underperformance, the investment bank thinks that the stock will rise as subscriber numbers grow. Raymond James upgraded the stock to “Strong Buy” and said the company is approaching a “profit inflection.”
Hanesbrands (HBI): [DOWNGRADE] Deutsche Bank downgraded the stock. Analyst Tiffany Kanaga wrote that “mounting global concerns pile onto existing domestic ones around retailer bankruptcies/closures and private label disintermediation.”
CME Group (CME): [DOWNGRADE] Bank of America downgraded its stock to “neutral” from “buy.” An “uncertain” macroeconomic backdrop as well as the 2019 outlook for the capital market sector and stocks made analyst Michael Carrier less bullish on shares.
Colgate-Palmolive (CL): [UPGRADE/RATING] Goldman Sachs upgraded its rating on shares to “buy” from “neutral” and Evercore ISI initiated coverage on the company’s equity with a positive outlook.
MOMENTUM STOCKS:
GAINERS: BBBY
LOSERS: M
TODAY’S IPOs:
None.