Wall Street’s recent rally in risk appetite looks to fade into Thursday’s open, with US equity futures falling after a mixed session in Asia on concerns surrounding rising tensions between America and China, which offset signs of a better-than-expected start to the earnings season.
This subdued opening comes into play following Wednesday’s session where US stocks managed to grasp on to a second day of consecutive gains following upbeat results from some of the largest Wall Street banks.
Goldman Sachs (GS: +9.54%) and Bank of America (+7.16%) both recorded their biggest one-day gains in years after reporting better than expected results in the fourth quarter, best performing S&P stocks for the day.
The S&P 500 ended +0.24% higher; financials took lead, rising +2.13%, followed by Real Estate +0.63%.
These advances helped offset declines in Consumer Staples and Communication Services, negative -0.54% and -0.43% respectively.
The Dow Jones Industrial Average ended +0.6%, while the tech-heavy Nasdaq Composite rose +0.2%; giving up some of its gains following reports that US prosecutors are pursuing a criminal case against Huawei for alleged theft of trade secrets.
Yesterday’s session also took host to a busy news day, with sentiment supported by additional stimulus measures from China in the form of a $84 billion injection by the People’s Bank of China into the country’s banking system via open market operations.
Meanwhile, in Europe, UK prime minister Theresa May survived a vote of no confidence, a day after her Brexit deal suffered a historic rejection in the House of Commons.
In terms of today’s economic data; Weekly Jobless Claims, Building Permits and Philadelphia Fed Manufacturing figures are set to be released at 8:30am ET.
In earnings, major corporations including Morgan Stanley (MS), American Express (AXP) and Netflix (NFLX) are amongst the 48 companies scheduled to report their financial results today.
TODAY’S TOP HEADLINES:
Brexit: Calls for a second Brexit referendum grow as Theresa May fights for a new deal. (CNBC)
In one of the more dramatic weeks in British politics, following the defeat of Prime Minister Theresa May’s Brexit agreement and her government’s survival of a no-confidence vote, calls are now growing for a second Brexit referendum.
Political leaders from the Scottish National Party (SNP), Wales’ Plaid Cymru, the Green party and Liberal Democrats are calling on their fellow opposition party, Labour, to join them in calling for a second referendum on Brexit, known now as a “People’s Vote.”
ECONOMIC CALENDAR:
Today’s Economical Announcements
08:30AM – ★☆☆ – Weekly Jobless Claims (Previous: 216,000)
08:30AM – ★★★ – Building Permits (Dec) (Previous: 1.328M)
08:30AM – ★★☆ – Building Permits (MoM) (Dec) (Previous: 5.0%)
08:30AM – ★★☆ – Housing Starts (Dec) (Previous: 1.256M)
08:30AM – ★★☆ – Housing Starts (MoM) (Dec) (Previous: 3.2%)
08:30AM – ★★★ – Philadelphia Fed Manuf. (Jan) (Previous: 9.4)
Tentative – ★★☆ – Goods Trade Balance (Nov) (Previous: -77.25B)
10:45AM – ★★☆ – FOMC Member Quarles Speaks
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Cars.com (CARS): [NEWS] Announced it was reviewing various strategic alternatives to enhance shareholder value, including a possible sale of the online auto marketplace operator.
Morgan Stanley (MS): [EARNINGS] Reported quarterly profit of 80 cents per share, missing the 89 cents a share consensus estimate. Revenue below forecasts.
Electronic Arts (EA): [DOWNGRADE] Jefferies downgraded the video game publisher’s stock to “neutral” from “buy,” saying it sees a risk to earnings with a slate of unproven games coming to market in 2019.
CSX (CSX): [EARNINGS] Beat estimates by 2 cents a share, with quarterly profit of $1.01 per share. Revenue in line with forecasts.
Alcoa (AA): [EARNINGS] Reported adjusted quarterly profit of 66 cents per share, beating forecasts by 16 cents a share. Revenue in line with forecasts.
Gannett (GCI): [NEWS] Wall Street Journal reported that Tribune Publishing had recently tried to revive merger talks between the two.
PG&E (PCG): [NEWS] The debt rating of PG&E’s Pacific Gas & Electric unit was cut by Standard and Poor’s for the third time this month, after the utility missed interest payments on some of its debt.
Apple (AAPL): [NEWS] Apple plans to cut back on hiring for some divisions following a slowdown in iPhone sales, according to a Bloomberg report.
Goldman Sachs (GS): [NEWS] Removed “eight digits” worth of dollars from the bonus pool of its fixed income division in the last week of 2018, according to a Wall Street Journal report.
Salesforce.com (CRM): [RATING] Rated “overweight” in new coverage at Stephens, which thinks Salesforce has a competitive advantage in a large and fast-growing market.
Becton Dickinson (BDX): [EARNINGS] Reported adjusted preliminary first quarter profit of $2.70 per share, 9 cents a share above estimates. Revenue topped forecasts.
Sprint (S): [NEWS] Sprint is the latest mobile network operator to say it will stop giving real-time location data on its customers to data middlemen. T-Mobile, Verizon, and AT&T and done the same earlier this month.
MOMENTUM STOCKS:
GAINERS: UNFI, FDC, GS, BAC, SCHW, CMA, AMTD, FRC
LOSERS: EIX
TODAY’S IPOs:
None.