Stocks across Europe and Asia, as well as onshore US equity futures rose on Monday, following a mainstream Wall Street Journal report that renewed hopes of an impending trade deal between Washington and Beijing.
The WSJ reported, on Sunday, that Beijing has offered to lower duties and restrictions on American farm, chemical and auto products – with the US considering removing most, if not all, sanctions levied against Chinese products since last year.
Sticking points do remain; however, talks have progressed to the extent that a formal agreement could be reached at an upcoming summit between Donald Trump and Chinese President Xi Jinping, once Xi concludes a trip to Italy and France, said the Journal.
These signs of progress between the world’s two strongest economic powerhouses look to build upon Friday’s advances – where US stocks followed global equities higher, after stronger-than-expected economic data in China and Germany, helped alleviate fears of global economic slowdown.
The S&P 500 added +0.62% to its value, concluding the week positive +0.46%, buoyed by the Energy (+1.84%) and Healthcare (+1.42%) sectors, to register its highest close since November 8.
Real Estate (-0.21%), Consumer Staples (-0.18%) and Materials (-0.13%) were the lone sectors to end the session in the red.
The Dow Jones Industrial Average rose +0.44%, while the tech-heavy Nasdaq Composite advanced +0.69% into the close.
Looking ahead, earnings reports are expected to be released today from; Salesforce.com (CRM), YY Inc. (YY) and Ctrip.com (CTRP).
In the economic front, Construction Spending figures are set to be released at 10am EST.
TODAY’S TOP HEADLINES
China & Trade: US and China Close In On Trade Deal. (The WSJ)
China and the US are in the final stage of completing a trade deal, with Beijing offering to lower tariffs and other restrictions on American farm, chemical, auto and other products and Washington considering removing most, if not all, sanctions levied against Chinese products since last year.
Politics: Trump Links Cohen Hearing With Decision to Abandon Korea Talks. (Bloomberg)
President Donald Trump said that the House hearing of his former lawyer and fixer Michael Cohen contributed to his decision to walk away from negotiations with North Korea’s Kim Jong Un, in a new explanation for the collapsed talks between the leaders.
ECONOMIC CALENDAR
Today’s Economical Announcements
09:45AM – ★☆☆ – NY Business Conditions (Feb) (Previous: 855.1)
10:00AM – ★☆☆ – Construction Spend. (MoM) (Dec) (Previous: 0.8%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks
Children’s Place (PLCE): [EARNINGS] Earned an adjusted $1.10 per share for the fourth quarter, well below the $2.10 consensus estimate. Revenue also missed forecasts, and the company’s full-year earnings outlook is also significantly below Street forecasts.
Kraft Heinz (KHC): [UPGRADE] Upgraded to “equal-weight” from “underweight” at Morgan Stanley, which notes that prior concerns like a dividend cut and an earnings shortfall have now been priced into the stock after its recent plunge.
Foot Locker (FL): [UPGRADE] Upgraded to “buy” from “hold” at Pivotal Research, following the athletic footwear and apparel retailer’s upbeat fourth quarter earnings. Pivotal also increased the price target to $73 per share from $64.
Dillard’s (DDS): [DOWNGRADE] JPMorgan Chase downgraded the retailer’s stock to “underweight” from “neutral,” following a 25 percent year-to-date rise. The downgrade also comes amid rising inventory levels, with the report pointing to past negative effects from inventory buildups.
Tesla (TSLA): [NEWS] Plans to unveil its Model Y SUV on March 14. CEO Elon Musk tweeted that the vehicle will cost about 10 percent more than the Model 3 and have slightly less range. Separately, Tesla paid off a $920 million convertible bond in cash late Friday. The settlement was in cash because Friday’s close of $294.79 was below the conversion price of $359.87.
Amazon.com (AMZN): [REVIEW] Evercore raised its price target on Amazon to $1,965 per share from $1,800. The firm said gross profit growth is now the best metric upon which to judge Amazon, noting that a shifting business mix means that gross profit is likely to grow four percentage points faster than revenue over the next three years.
Eli Lilly (LLY): [NEWS] Introduced a new generic version of its Humalog insulin which will cost 50 percent less than the brand-name version.AT&T (T): [NEWS] Planning a revamp of CNN’s digital operation, according to people familiar with the situation who spoke to The Wall Street Journal.
CVS Health (CVS): [NEWS] Could benefit from changes in the way the government pays for kidney disease treatment. Reuters reports that the proposed changes would favor lower cost home treatment, an area where CVS has been making a significant push, and that the change could present a risk to dialysis clinic operators DaVita and Fresenius Medical Care.
Biogen (BIIB): [NEWS] Biogen announced the purchase of London-based gene therapy company Nightstar Therapeutics for $25.50 per share, 68 percent above Nightstar’s Friday close of $15.16 per share.
Bed Bath & Beyond (BBY): [DOWNGRADE] Barclays downgraded the housewares retailer’s stock to “underweight” from “equal weight”, saying it is increasingly disappointed with the results of the company’s efforts to implement a broad restructuring.
MOMENTUM STOCKS
GAINERS: PBYI, ZS, XRAY, SRCL, ACHC, FOLD, AMC, TGNA, PTLA
LOSERS: NTNX, DDD, SNH, WBA, HPQ, CROX
TODAY’S IPOs
None.