Wall Street’s recent surge in risk appetite spurred by dovish Federal Reserve comments and new economic stimulus measures between Washington and Beijing lost some momentum on Monday – with US pre-market equity futures faded following an earlier advance.
The US stock market staged one of its biggest rallies in over seven years on Friday as a confluence of factors ranging from a blockbuster jobs report, adding to reassuring comments from the Federal Reserve, Jay Powell saying; the US central bank would be “patient” and flexible with monetary policy decisions this year, as well as signs of US-China trade dispute progress – combined to draw buyers off the sidelines.
The surge marked the third best day for all three indices since late 2011 – with the S&P 500 closed up +3.35%, the Nasdaq Composite positive +4.28% and the Dow Jones Industrial Average adding +3.33% to its value.
Friday’s advances are only surpassed, most recently, by the post-Christmas rally on December 26, where the markets were boosted by pension fund re-balancing.
Last week’s move capped a volatile first week of new year trading; 2019 starting much as 2018 ended, with investors nervous amid concerns over global economic growth and tightening monetary policy.
However, Friday’s upbeat sentiment saw the trading week string together a +1.74% advance in the S&P, an increase of +2.08% in the Nasdaq and gains of +1.31% is the Dow Jones.
In today’s data front, ISM non-manufacturing figures for December are expected to be released and tracked by investors at 10:00am ET.
In corporate news, Commercial Metals Company (CMC) is due to release its recent earnings report before the opening bell.
TODAY’S TOP HEADLINES:
Trade: Beijing says both sides have expressed a desire to hammer out a deal. (CNBC)
As officials from Beijing and Washington met to attempt to hash out their countries’ ongoing trade dispute, China’s foreign ministry said Monday that both sides had expressed a will to work together in order to implement the consensus of their respective presidents.
Politics: Shutdown Is Felt as Negotiators Dig In Over Border Wall. (The WSJ)
Federal workers braced for missing their first paycheck this week as negotiators showed little sign of progress in ending a two-week-old partial government shutdown.
ECONOMIC CALENDAR:
Today’s Economical Announcements
10:00AM – ★★☆ – Cap Goods Ship Ex. Air. (MoM) (Previous: -0.1%)
10:00AM – ★★☆ – Factory Orders (MoM) (Nov) (Previous: -2.1%)
10:00AM – ★☆☆ – ISM Non-Manuf. Activity (Dec) (Previous: 65.2)
10:00AM – ★★☆ – ISM Non-Manuf. Employ. (Dec) (Previous: 58.4)
10:00AM – ★★★ – ISM Non-Manuf. PMI (Dec) (Previous: 60.7)
12:40PM – ★★☆ – FOMC Member Bostic Speaks
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
PG&E (PCG): [NEWS] Is exploring filing for bankruptcy protection for some or all of its business, Reuters reported on Friday, citing sources.
General Electric (GE): [NEWS] Is being targeted by private-equity firm Apollo Global Management, which is reportedly working on an offer for the business. GE’s division is reportedly worth as much as $40 billion.
Dollar Tree (DLTR): [NEWS] Starboard Value, an activist investor, wants the company to sell its Family Dollar business.
Tesla (TSLA): [NEWS] CEO Elon Musk broke ground on the company’s Gigafactory in the outskirts Shanghai.
General Motors (GM): [UPGRADE] Upgraded to “outperform” from “market perform” at BMO Capital Markets, with the bank citing a potential higher multiple for GM’s self-driving car division being priced into the stock. BMO also hiked its price target on GM to $41 from $38.
Eli Lilly (LLY): [BUYOUT] Announced it will buy Loxo Oncology (LOXO) for $8 billion in cash, or $235 per share.
Apple (AAPL): [NEWS] Apple and Samsung struck a deal that lets the iPhone maker distribute iTunes shows on Samsung smart TVs.
Amazon (AMZN): [RATING] Pivotal Research Group initiated coverage of Amazon with a “buy” rating and a price target of $1,920, implying an upside of nearly 21 percent.
Micron (MU): [UPGRADE] BMO Capital Markets upgraded the chipmaker’s stock to “outperform” from “market perform,” noting the shares “have bottomed out.”
MOMENTUM STOCKS:
GAINERS: GME, NFLX
LOSERS: RPM
TODAY’S IPOs:
None.