US equity futures were positioned slightly higher on Monday, after parring a larger early-morning advance, as a move on tariffs by the United States reminded investors of lingering trade risks and overshadowed a strong report on factory activity data in China.
The Markit Manufacturing Purchasing Managers' index in China rose to 51.8 in November, a three-year high; suggesting that recent government stimulus, paired with slow-but-steady trade progress, has boosted sentiment and output in the world's largest export market.
This data came ahead of new trade related headlines, where President Donald Trump was reported to have reinstated tariffs, “effective immediately”, on imports of steel and aluminum from Brazil and Argentina after accusing the countries of currency manipulation.
Linking his trade agenda with his Federal Reserve criticism in an early morning stream of tweets, Trump said; the two South American countries “have been presiding over a massive devaluation of their currencies. which is not good for our farmers.”
In a second Twitter post, the president renewed his assault on the Fed, adding; “The Federal Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies.”
These developments come after Friday’s shortened trading session, where declines on November’s final day of trading was not enough to keep US stocks from registering their best month since June.
The S&P 500 slipped -0.37% on Friday, however held onto a +3.34% gain for November. The Nasdaq Composite and Dow Jones Industrial Average also recorded their largest monthly gains since early summer, climbing +4.12% and +3.39%, respectively.
Ahead, in today’s economic calendar, Monday includes; Markit Manufacturing PMI for November at 9:45am EST, followed by the ISM Manufacturing Index for November and Construction Spending for October at 10am EST.
Coupa Software (COUP) is scheduled to report its earnings today.
TODAY'S TOP HEADLINES
Trade, Brazil & Argentina: Trump Revives Brazil, Argentina Steel Tariffs, Swipes at Fed. (Bloomberg)
President Donald Trump is reinstating tariffs on steel and aluminum from Argentina and Brazil, nations he criticized for cheapening their currencies to the detriment of US farmers, and again called on the Federal Reserve to loosen monetary policy.
ECONOMIC CALENDAR
Today's Economical Announcements.
09:45AM - ★★☆ - Manufacturing PMI (Nov) (Previous: 52.2)
10:00AM - ★★☆ - Construction Spending (Oct) (Previous: 0.5%)
10:00AM - ★★★ - ISM Manufacturing PMI (Nov) (Previous: 48.3)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Roku (ROKU): [DOWNGRADE] Downgraded to “underweight” from “equal-weight” at Morgan Stanley, which sees both revenue and gross profit growth slowing meaningfully in 2020.
Splunk (SPLK): [UPGRADE] Upgraded to “buy” from “neutral” at Goldman Sachs, which points to a number of positive trends for the data analytics company its free cash flow guidance over the next few years.
Walt Disney (DIS): [NEWS] Disney’s “Frozen 2” set a Thanksgiving holiday weekend record by taking in $123.7 million in North American ticket sales. That broke the previous record set in 2013 by “The Hunger Games: Catching Fire.”
Las Vegas Sands (LVS), Wynn Resorts (WYNN): [NEWS] New figures showing gambling revenue in Macau fell 8.5% in November compared to a year earlier. The drop comes amid lower economic growth and the ongoing trade dispute between the US and China.
General Electric (GE): [NEWS] The company’s GE Healthcare division holds an investor meeting today, hoping to spark new interest in a unit that is seen as key to the company’s ongoing turnaround plan.
Wells Fargo (WFC): [DOWNGRADE] Downgraded to “underperform” from “market perform” at Raymond James, which expects Wells Fargo’s revenue to shrink for a fourth straight year in 2020.
Cedar Fair (FUN): [DOWNGRADE] Downgraded to “neutral” from “buy” at B. Riley FBR, citing a number of factors including difficult attendance comps for the amusement park operator.
ADT (ADT): [DOWNGRADE] Downgraded to “neutral” from “buy” at Bank of America/Merrill Lynch. The firm notes a better than 50% year-to-date gain for the stock as well as its expectation of a profit slowdown next year.
Fiat Chrysler (FCAU): [NEWS] Reached a tentative four-year labor deal with the United Auto Workers union, following similar agreements with U.S. rival Ford (F) and General Motors (GM).
MOMENTUM STOCKS
GAINERS: NTNX
DECLINERS: DELL, VMW
TODAY'S IPOs
None.
