Global equities traded notably higher this morning amid optimism that US-China trade tensions will subside following this weekend’s G20 summit; havens fell out of favor, while oil rallied as Opec looks to extend production cuts.
Expectations of a trade truce came after the Trump administration’s recent move to ease restrictions on China’s Huawei, removing eight companies from the Commerce Department’s blacklist, while China, in turn, had agreed to buy an unspecified amount of US agricultural goods; both countries also simultaneously pledged not to apply fresh tariffs on each-other.
The promising proposal, which did much to prompt relief, lacks further clarity however, with just a day after agreement, President Trump and his top advisers having stated no timeline nor schedule for new talks were arranged - suggesting to some that the two sides remain as far apart as they were when talks broke up in May.
Nonetheless, these developments look to help extend upon Friday’s gains, where Wall Street recorded its best ‘first-half’ in more than two decades, as hopes held high for a positive outcome on trade relations.
The benchmark S&P 500 index was up +0.51% on Friday, securing a +5.01% rise for the month, its best June since 1955. The S&P has now advanced +18.1% since the start of the year, its strongest first-half performance since 1997.
Ahead, in today’s economic calendar, Monday includes; the PMI Manufacturing Index for June at 9:45am EST, followed by Construction Spending for May and the ISM Manufacturing Index for June at 10am EST.
TODAY'S TOP HEADLINES
North Korea: Trump Steps Into North Korea as Two Sides Agree to Restart Nuclear Talk. (The WSJ)
Donald Trump became the first sitting US president to step across the boundary dividing North and South Korea, leading to a hastily organized meeting with North Korean leader Kim Jong Un and a commitment to restart nuclear talks.
ECONOMIC CALENDAR
Today's Economical Announcements.
09:45AM - ★★☆ - Manufacturing PMI (Jun) (Previous: 50.1)
10:00AM - ★★★ - ISM Manufacturing PMI (Jun) (Previous: 52.1)
10:00AM - ★★☆ - Construction Spending (May) (Previous: 0.1%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Micron Technology (MU), Skyworks Solutions (SWKS), Qualcomm (QCOM), Broadcom (AVGO): Chipmaker shares rose broadly after President Donald Trump and Chinese President Xi Jinping agreed the U.S. and China will not impose additional tariffs on each other’s goods.
Wynn Resorts (WYNN), Las Vegas Sands (LVS): Casino stocks climbed after the Macau gaming authority reported gambling revenues rose more than expected in June.
Carnival (CCL): Downgraded to “hold” from “buy” at Berenberg. The firm also slashed its price target on Carnival to $48 per share from $60 a share. Berenberg cited expectations of slow growth through 2020 for the downgrade. Carnival shares slid 0.3%.
Biogen (BIIB): Reported positive results for its spinal muscular atrophy drug, Spinraza. The company said pre-symptomatic infants who were treated with the drug achieved “unprecedented” milestones, including 88% of children walking independently.
United Therapeutics (UTHR): Credit Suisse upgraded United Therapeutics to “outperform” from “neutral” and raised his price target on the stock to $101 per share from $98 a share, citing an attractive valuation at current levels.
KB Home (KBH): Upgraded to “neutral” from “sell” by an analyst at BTIG which cited better-than-expected quarterly results, but “the biggest positive surprise is a greater proportion of CA orders and backlog that will help offset weaker margins in other markets in late 2019 and likely early 2020.”
Evo Payments (EVOP): BTIG downgraded the payments company to “neutral” from “buy,” citing a “full” valuation after the stock’s 27% surge this year.
Berkshire Hathaway (BRK.A): Berkshire Hathaway Chairman and CEO Warren Buffett has pledged to donate $3.6 billion worth of Berkshire stock across five different charities.
MOMENTUM STOCKS
GAINERS: SRPT, GMS, NSTG, NVTA, ATNX, FBP, NVCR, SUM
DECLINERS: ARWR, NRZ
TODAY'S IPOs
None.
