Global equity markets paused on Wednesday, as investors pieced together mixed trade-related headlines against a backdrop of slowing global growth – US pre-market futures positioned higher into today’s opening bell.
Tuesday’s session saw US stocks sink amid conflicting reports over planned trade talks between Washington and Beijing.
The global slowdown, which was articulated by cuts to growth forecasts from the International Monetary Fund earlier this week, was paired with reports of stalled progress in trade talks between the world’s two largest economies, adding pressure to the market’s fourth week of consecutive gains.
Larry Kudlow, White House adviser, soon after denied these reports, suggesting discussions were being bogged down by China’s resistance to tackle structural reforms and address issues such as intellectual property theft – supporting buying into late-afternoon trading and stabilizing trade overnight in Asia.
The S&P 500 finished the session -1.4% lower after clawing back from a -2% drop, with all sectors, except Utilities (+0.19%), finishing in the red.
Energy being the sessions main laggard, with a -2.18% sector retreat, mirroring a -2% decline in Brent crude prices.
The Dow Jones Industrial Average dropped -1.23%, while the tech-heavy Nasdaq Composite fell -2%, to close.
While the outlook for the world and domestic economy continues to remain on investors’ minds, corporate news is also expected to keep markets busy on Wednesday.
In today’s earnings front, a slew of companies are set to report, including; PG, CMCSA, KMB, APH, ABT, BKU, TEL, NTRS before the opening bell.
Followed by; F, STL, LVS, CCI, SLM, CTXS, TXN, URI, RJF, XLNX, TER after market close.
Meanwhile, in economic news; House Price Index and Richmond Manufacturing Index data are expected to be released at 9:00am and 10:00am EST respectively.
TODAY’S TOP HEADLINES:
Brexit: May Says Extending Exit Day Isn’t the Answer. (Bloomberg)
May faced repeated questions in the Commons over whether she should extend Article 50 and delay Brexit beyond March. She’s still against the idea, but her answers didn’t close the door on it. “Extending Article 50 I don’t believe resolves any issues,” May said. Parliament will still need to decide if it wants a deal, a no-deal Brexit, or no Brexit, she added.
China & Trade: China could completely cut off investment into Silicon Valley amid Huawei bust-up. (CNBC)
China could completely cut investment into the Silicon Valley, according to the former deputy governor of the People’s Bank of China, following intense scrutiny of the world’s largest telecom equipment maker.
ECONOMIC CALENDAR:
Today’s Economical Announcements
09:00AM – ★☆☆ – House Price Index (MoM) (Nov) (Previous: 0.3%)
09:00AM – ★☆☆ – House Price Index (YoY) (Nov) (Previous: 5.7%)
09:00AM – ★☆☆ – House Price Index (Nov) (Previous: 267.9)
10:00AM – ★☆☆ – Richmond Manufacturing Index (Previous: -8)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Synchrony Financial (SYF): [EARNINGS] Earned $1.09 per share for its latest quarter, 16 cents a share above estimates. Revenue beat forecasts.
IBM (IBM): [EARNINGS] Reported adjusted quarterly profit of $4.87 per share, 5 cents a share above consensus. Revenue beat forecasts. IBM gave strong 2019 guidance on continued strength in its services business.
Capital One (COF): [EARNINGS] Reported adjusted quarterly profit of $2 per share, missing the consensus estimate of $2.37 a share. Revenue fell shy of forecasts.
Comcast (CMCSA): [EARNINGS] Reported adjusted quarterly profit of 64 cents per share, beating consensus estimates by 2 cents a share. Revenue beat Street forecasts.
United Technologies (UTX): [EARNINGS] Reported adjusted quarterly profit of $1.95 per share, well above the consensus estimate of $1.53 a share. Revenue above forecasts.
Procter & Gamble (PCG): [EARNINGS] Beat estimates by 4 cents a share, with adjusted quarterly profit of $1.25 per share. Revenue topped forecasts.
TD Ameritrade (AMTD): [EARNINGS] Beat estimates by 10 cents a share, with adjusted quarterly profit of $1.11 per share. Revenue came in above forecasts.
Walmart (WMT): [UPGRADE] Morgan Stanley upgraded the retailer’s stock to “overweight” from “equal-weight,” saying Walmart will be one of the few retailers to grow earnings this year.
Viacom (VIAB): [NEWS] Viacom announced the acquisition of live-TV streaming service Pluto TV for $340 million in cash.
Pfizer (PFE): [DOWNGRADE] UBS downgraded Pfizer to “neutral” from “buy,” noting Pfizer’s valuation and a long-term “patent cliff.”
Merck (MRK): [DOWNGRADE] Downgraded to “market perform” from “outperform” at BMO Capital, which is concerned about Merck’s overdependence on its cancer treatment Keytruda.
Johnson & Johnson (JNJ): [NEWS] J&J is pursuing an acquisition of surgical robotics firm Auris Health, according to a Bloomberg report.
Walgreens Boots Alliance (WBA): [NEWS] Walgreens will pay more than $269 million to settle a number of federal and state lawsuits that had accused it of overbilling federal health-care programs.
Apollo Global (APO): [NEWS] The private-equity firm agreed to buy European packaging company RPC for $4.28 billion in cash. It had been reported yesterday that the two sides were close to a deal.
MOMENTUM STOCKS:
GAINERS: –
LOSERS: ARNC, SWK
TODAY’S IPOs:
None.