President Donald Trump made good on his threat, first revealed on Twitter five days prior, to raise tariffs to 25% from 10% on an estimated 5,700 product categories comprising around $200 billion worth of Chinese imports, as negotiations in Washington failed to produce a breakthrough agreement.
The new tariff level won’t apply to goods that are already heading to the United States, providing Washington and Beijing with a two-week window to reach a comprehensive agreement; a sliver-lining which had been factored into Asian markets, which traded mostly higher in the overnight session.
Beijing’s commerce ministry said, following the hike, that it had “deeply regretted” the increased US tariffs, but expressed optimism that a negotiated settlement could still be reached.
Yesterday’s session saw Wall Street notch its fourth straight day of losses, continuing this week’s well-established trend where, on Monday, Trump had initially threatened to slap higher tariffs on Chinese goods, a development which wrong-footed many investors, who had enjoyed a broad equity market rally since the start of 2019.
Thursday’s session concluded with the S&P 500 down -0.30%, after experiencing a decline of -1.5% earlier in the session, buoyed into the close after Trump said a trade deal with Beijing was still possible – a comment which had helped remedy some of the market’s anxiety.
The Dow Jones Industrial Average finished -0.47% lower, after dropping -1.7% at session lows, while the Nasdaq Composite fell -0.54%, compared to its -1.9% decline earlier in the day.
Aside from trade concerns, today’s big story will be the pricing of Uber Technologies (UBER), after the company had raised $8.1 billion selling 180 million shares at $45 each – a price listed at the bottom of the marketed range.
While current market conditions look to have certainly played a part in the pricing, the company had said to have prioritized investors it thinks are in for the long haul; however, despite this valuation, the Uber IPO is expected to be positioned as one of the top 10 largest initial public offerings in US history.
In today’s economic calendar; Consumer Price Index figures for April are expected to be released at 8:30am EST.
In corporate news; Viacom (VIAB), Cars.com (CARS), Tribune Media (TRCO), JD.com (JD) and Weatherford International (WFT) are amongst the major companies scheduled to report today.
TODAY’S TOP HEADLINES
China & Trade: US tariffs on China jump as deadline passes, China immediately says it will retaliate. (CNBC)
President Donald Trump raised the stakes in his trade conflict with China as the US increased tariffs on $200 billion in Chinese goods on Friday. Despite the escalation in the trade war, the Shanghai Composite rose 3% and the Shenzhen soared 4%.
IPO: Uber Prices IPO at $45 a Share, Neat Low End of Range. (The WSJ)
Uber Technologies Inc. priced its initial public offering at $45 a share, near the low end of its expected range as the ride-hailing giant grapples with choppy markets and the disappointing debut of its chief rival.
ECONOMIC CALENDAR
Today’s Economical Announcements.
08:30AM – ★★★ – Core CPI (MoM) (Apr) (Previous: 0.1%)
08:30AM – ★★☆ – Core CPI (YoY) (Apr) (Previous: 2.0%)
08:30AM – ★★☆ – CPI (MoM) (Apr) (Previous: 0.4%)
08:30AM – ★☆☆ – CPI (YoY) (Apr) (Previous: 1.9%)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Zillow (ZG): [EARNINGS] Lost 33 cents per share for the first quarter, smaller than the 35 cents a share loss that Wall Street analysts had been expecting. The real estate website operator’s revenue beat forecasts, increasing 51% compared to a year ago. It also saw an increase in unique monthly users.
Symantec (SYMC): [NEWS] The cybersecurity software company’s chief executive officer unexpectedly resigned, and it issued a profit warning for the current quarter.
GoPro (GPRO): [EARNINGS] Reported an adjusted quarterly loss of 7 cents per share, 2 cents a share smaller than expected. The high definition camera maker’s revenue beat estimates. GoPro also raised its full-year revenue forecast amid high demand for its new line of action cameras.
Dropbox (DBX): [EARNINGS] Beat estimates by 4 cents a share, with adjusted quarterly profit of 10 cents per share. Revenue came in ahead of expectations, as well. Dropbox signed up more paying users during the quarter, and also posted an increase in revenue per user.
Yelp (YELP): [EARNINGS] Earned 2 cents per share for the first quarter, compared to consensus estimates of a penny a share. The consumer review website operator also had higher-than-expected revenue. Yelp gave weaker-than-expected revenue guidance for the current quarter, however, and said unique visitors to its desktop and mobile sites had declined during the first quarter.
Wynn Resorts (WYNN): [EARNINGS] Reported adjusted quarterly earnings of $1.61 per share, a penny a share ahead of consensus. The casino operator’s revenue was very slightly below estimates amid a drop in Macau casino action.
Booking Holdings (BKNG): [EARNINGS] Earned an adjusted $11.17 per share for its latest quarter, 10 cents a share below consensus forecasts. Revenue also missed estimates, but the parent of Priceline and other travel services said it should see revenue growth this quarter.
Marriott (MAR): [EARNINGS] Earned an adjusted $1.41 per share for the first quarter, 7 cents a share above estimates. Revenue missed forecasts, however, but Marriott said it was able to increase North American profit margins despite higher labor costs and modest revenue growth.
Viacom (VIAB): [EARNINGS] Reported adjusted quarterly profit of 95 cents per share, beating the consensus estimate of 80 cents a share. Revenue was below forecasts, however. Viacom said its results were helped by significant gains in program distribution.
Equifax (EFX): [EARNINGS] Matched estimates with adjusted quarterly profit of $1.20 per share, but revenue missed forecasts and the company’s second-quarter earnings outlook falls below consensus. Equifax said costs related to the data breach announced in 2017 have now totaled $1.35 billion.
TiVo (TIVO): [NEWS] TiVo will split itself into two separate companies, one for its product division, the other for intellectual property licensing.
News Corp. (NWSA): [EARNINGS] Reported adjusted quarterly profit of 4 cents per share, compared to forecasts of a breakeven quarter. Revenue came in below estimates. The bottom line was helped by an increase in digital subscriptions for the Wall Street Journal and New York Post publisher, as well as expansion at its digital real estate businesses.
Boston Beer (SAM): [BUYOUT] Will buy rival craft brewer Dogfish Head Brewery in a $300 million cash and stock deal.
MOMENTUM STOCKS
GAINERS: ROKU, HSC, KTOS, RCM, NUAN
DECLINERS: TEN, SAIL, COMM, AMRX, EPC, RDFN, TTD, ETSY, WWW
TODAY’S IPOs
Diamond Eagle Acquisition (DEACU) (Price: 10) (Est. Vol: $350.0M)
Health Sciences Acquisitions (HSACU) (Price: 10) (Est. Vol: $100.0M)
Jiayin Group (JFIN) (Low: 10.50, High: 12.50) (Est. Vol: $40.3M)
Postal Realty Trust (PSTL) (Low: 19, High: 21) (Est. Vol: $100.0M)
Sonim Technologies (SONM) (Price: 11) (Est. Vol: $39.3M)
Uber Technologies (UBER) (Price: 45) (Est. Vol: $8.10B)