US equity futures traded higher this morning, during an otherwise relatively flat week of trading, leading up to Fed Chairman, Jerome Powell’s, public address on Friday.
Federal Reserve officials had labelled the US economy as "resilient" in July, as noted in yesterday’s released minutes, even as policymakers voted to cut interest rates for the first time since 2008. Officials had cited President Donald Trump's trade war effect on business confidence as their primary concern.
Despite the so-called “re-calibration”, rather than the start of a more aggressive easing cycle, prospects of another rate cut next month and further easing this year remain high.
President Donald Trump kept up his relentless attack on the central bank, claiming that “the only problem we have is Jay Powell and the Fed.” On trade, he said the US and China will “probably” reach a deal.
The market’s initial reaction to the meeting minutes saw US stocks hold on to their early morning gains, where fresh optimism over consumer spending countered worries over economic growth.
The S&P 500 advanced +0.81% higher, boosted by strong earnings from retailers Target (TGT: +20.43%) and Lowe’s (LOW: +10.35%), which underlined the health of the American consumer market, even as concerns loom over the broader economy.
The Nasdaq Composite and blue-chip Dow Jones Industrial Average each added +0.90% to their values.
Ahead, in today’s economic calendar, Thursday includes; Weekly Jobless Claims at 8:30am EST, followed by Manufacturing and Services PMI data for August at 9:45am EST.
In corporate news, earnings are expected today from; Dick's Sporting Goods (DKS), Salesforce.com (CRM), BJ's Wholesale Club (BJ), Hormel Foods (HRL), Gap (GPS), HP (HPQ), VMware (VMW) and Intuit (INTU).
TODAY'S TOP HEADLINES
Politics: G-7 summit set to end without an agreement for the first time in history. (CNBC)
The Group of Seven (G7) summit is set to end without a joint communique for the first time in its 44-year history, after French President Emmanuel Macron decided to abandon the tradition citing “a very deep crisis of democracy.”
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★☆☆ - Weekly Jobless Claims (Previous: 220,000)
09:45AM - ★★☆ - Manufacturing PMI (Aug) (Previous: 50.4)
09:45AM - ★★☆ - Services PMI (Aug) (Previous: 53.0)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Dick’s Sporting Goods (DKS): [EARNINGS] Earned $1.26 per share for the second quarter, 5 cents a share above estimates. Revenue also beat forecasts. Comparable-store sales rose 3.2%, compared to a consensus forecast of 1% from analysts surveyed by Refinitiv. Dick’s also raised its full-year forecast.
BJ’s Wholesale (BJ): [EARNINGS] Beat estimates by 2 cents a share, with quarterly profit of 39 cents per share. Revenue was slightly below Street forecasts. BJ’s said it finished the quarter with strong momentum and said it is confident it will deliver on its prior full-year forecast.
Nordstrom (JWN): [EARNINGS] Beat estimates by 15 cents a share, with quarterly earnings of 90 cents per share. Revenue was slightly below forecasts, however. Nordstrom said its bottom line got a boost from lower expenses and inventory reductions.
Pure Storage (PSTG): [EARNINGS] Posted a quarterly profit of a penny a share, compared to an expected loss of 4 cents per share. The flash storage provider’s revenue exceeded forecasts, but it reduced its full-year revenue outlook for the second consecutive quarter. Pure Storage also announced the impending departure of Chief Financial Officer Tim Ritters, who will stay until a successor is found.
Hormel (HRL): [EARNINGS] Came in a penny a share ahead of expectations, with quarterly earnings of 37 cents per share. Revenue was essentially in line with expectations. Hormel’s results took a hit from weakness in its grocery products segment.
Wayfair (W): [UPGRADE] Upgraded to “buy” from “hold” at Stifel Nicolaus, which said a recent 12% drop has resulted in an attractive entry point for the online home furnishings retailer.
Splunk (SPLK): [EARNINGS] Reported adjusted quarterly profit of 30 cents per share, well above the 12 cents a share consensus estimate. The cybersecurity company’s revenue also exceeded Wall Street forecasts, and Splunk raised its full-year revenue guidance. Separately, the company announced the acquisition of cloud-monitoring software maker SignalFX for $1.05 billion in cash and stock.
Target (TGT): [UPGRADE] Upgraded to “buy” from “neutral” at Citi, even after Wednesday’s more than 20% gain. Citi said Target will continue to prove that it is a winner in the retail landscape.
L Brands (LB): [EARNINGS] Reported adjusted quarterly profit of 24 cents per share for the second quarter, 4 cents a share above estimates. Sales came in below forecasts, however, and L Brands issued a weaker-than-expected current-quarter earnings outlook as sales at the Victoria’s Secret chain continue to decline. L Brands did maintain its full-year earnings forecast.
Mylan (MYL): [NEWS] Was sued by Danish drugmaker Novo Nordisk for alleged patent infringement, in an attempt to stop Mylan from marketing a generic version of Novo’s diabetes drug Victoza.
MOMENTUM STOCKS
GAINERS: TGT, CHRS, CVNA, FND, PINS, HD
DECLINERS: CREE, MSGN, AFL, BGS, ELAN
TODAY'S IPOs
None.
