The S&P 500 Enters Correction, Coronavirus Fear Grows, Consumer Data Still Solid

The U.S. Market Is Down In Early Trading

The U.S. index futures are down hard again in Friday trading. This is the 7th day of decline and puts the major indices deep in correction territory. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all down more than 10% in that time.  The Dow Jones Industrial Average fell nearly 1200 points in Thursday action, its biggest one-day drop on record. This has been the worst week for equities since 2008 and the pain is not yet over.

The sell-off was sparked by the coronavirus and the market’s realization it will have a profound impact on global GDP this year. Yesterday’s warning from Goldman Sachs, that EPS growth would fall to 0% or lower, is the prime example. In virus news, the spread of the virus is not contained. New Zealand and Nigeria have reported their first cases while China and South Korean totals continue to rise. South Korea is now the center of the spread with 500 new cases. China’s epidemic appears to be slowing with only 327 new cases.

The virus is expected to gain a foothold in the U.S. and may already have done so. California reported its first case of community-based transmission and now has roughly 8,500 hundred people under observation.

 Stocks On The Move

Caterpillar is the worst-performing stock in the Dow. The bellwether of global economic activity was down as much as 3.0% in early pre-market trading but cut the losses to only -2.0% by the open of the session. Shares of Apple were also down about 3.0% in early trading while Chevron and Cisco both posted losses near 2.0%. Hard-hit S&P 500 stocks include Norweigan Cruise Lines and American Airlines are moving lower in today’s session and down more than 20% since the broad-market sell-off began.

Paypal is the latest to issue a warning about the virus. The global payments company says revenue will be impacted by the virus because the cross-border activity is slowing. Paypal says revenue will come in at the lower end of the previously stated range and below consensus.

Consumer Data Remains Strong

The day’s economic calendar is topped by the Personal Income and Spending data. The report shows income rose by a larger than expected 0.6% while spending increased only 0.2%. Analysts had been expecting income to rise by about 0.3% and spending the same. Looking in the rearview mirror, the previous month’s income was revised down by 0.1% while spending was revised higher. On the inflation front, PCE prices rose 0.1% last month and are up 1.7% YOY. At the core level, consumer inflation is up 1.6% from last year.

Virus Fears Scuttle Market, EPS Growth In Question, Data Still Holding Up

Equities Fall In Fourth Day Of Viral Rout

The U.S. futures market is indicating another deep decline on Thursday. The move, sparked by a growing fear of the coronavirus, shaved another -1.0% and more off of the major indices. Today’s news includes word of the first community-spread case of coronavirus in the U.S. Health officials in California report the first case in which there is no known trail of contagion. The news raises the stakes in terms of economic impact, if the U.S. shuts down like China and other countries global GDP could contract sharply in 2020.

Elsewhere in the world, China continues to report new cases despite signs its containment efforts are starting to pay off. In South Korea, the second hardest nation, the number of new cases spiked to set a new daily record. The disease is not yet contained in that country. Officials in Japan are taking precautionary efforts and have closed all schools, the number of cases is growing in the EU as well.

Stocks On The Move

Tech is among the days hardest hit. The sector has above-average exposure to China and international markets making it particularly vulnerable to the disease. Apple and Intel are among the days leaders but are not the biggest losers by far. Apple and Intell are both down about -1.5% while chipmakers NVDA and AMD have shed -2.5% and -3.9% respectively.

Microsoft and Goldman Sachs are the latest to issue warnings about the viral impact. Microsoft says it will not meet its Q1 revenue targets because the supply chain is re-ramping slower than expected. Goldman Sachs analysts issued a warning that EPS growth for the entire S&P 500 could come in well below expectations for the year, as low as 0.0% but I think their estimate is generous.

Best Buy issued a Q4 earnings report this morning. The company reports better than expected revenue and earnings that were driven by an increase in comp-store sales. Shares were up sharply following the news but have since given up their gains. Virgin Galactic got a major catalyst from analysts this morning. A double-dose of downgrades from Morgan Stanley and Credit Suisse have shares down more than -13.0%.

The Data Is Good, No Indication Of Weakness

The number of new claims for unemployment insurance climbed 8,000 over the last week but remains low and trending near historic lows. The continuing claims and total claims figures, both indicators of conditions within the broad labor market, were relatively flat over the past week. New orders for durable goods fell -0.20% over the past month. The figure is better than expected and accompanied by a double-digit increase in core capital goods orders. On the GDP front, the final read for 4th quarter GDP is 2.1% and unchanged from the previous estimate.

Equities Attempt Rebound, Coronavirus Spreading, 2020 Growth In Question

The U.S. Futures Edge Higher

The U.S. futures are edging higher in early Wednesday trading following two days of massive declines. The broad market made its biggest drop in over four years over the course of Monday and Tuesday. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all looking at opening gains in the range of 0.10% to 0.15%. Although early action looks bullish, traders are warned not to read too much into the move. The Coronavirus is still spreading and its impact on global economic activity only now being felt.

China reports an additional 406 cases in the overnight session with 52 more dead. South Korea says it has 169 new cases and a rising death toll as does Italy. France now reports its first case proving the virus can spread despite the best efforts of health officials. In the U.S. officials report over 50 cases, they are prepping the public for an epidemic the only questions are when it will start and how long it will last. Regardless, the economic impact of this event will be wide-ranging and long-lasting.

Stocks On The Move

The tech sector is trying to move higher in early trading despite its entering correction territory. Now down 10% from recent highs the sector is on the verge of a full-blown bear market. Shares of Apple are among the leaders, down -12% in the last two days, but up about 0.4% in early action.

Shares of Office Depot are among today’s hottest issues. The company reported better than expected results and positive guidance that lifted shares 5.0%. Shares of TJX, parent of the TJMaxx chains of apparel stores, are up more than 6.15% after it reported better than expected earnings. The company says comps rose 6.0% sparking a similar rise in share prices.

Fast-food retailers Papa John’s and Wendy’s are both moving lower. Both companies reported better than expected results due to strength in the U.S. consumer. the downside is outlook failed to impress and that has investors second-guessing their positions.

Volatility Is On The Rise

The VIX, a so-called “fear gauge”, spiked over the last two days. The index, a measure of options prices relative to the S&P 500, has reached levels above 25 and is fast approaching a two-year high. The index shows a high degree of demand for options, protection against a market downturn, and that spells lower prices for the S&P 500.

On the economic front, New Home Sales are due out later in the session. Sales are expected to rise from the previous month and may top estimates. Warmer than expected weather has had a positive impact on other housing data.

 

S&P 500 Rebounds, A Correction Is Coming

Equities Up In Early Trading

The U.S. futures are trading higher in the pre-market session although earlier gains have been muted. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all indicated up about 0.15%. The rebound comes a day after the broad market shed more than -3.0% in one of the deepest sell-offs of the last three years. Although the market tends to close higher following sell-offs of this type, traders are warned this correction is not over. Monday’s decline is only the first wave of selling now that the market accepts the coronavirus will hurt global economic activity this year.

The virus is now spreading in areas outside of China. South Korea reports more than 800 infected while Italy and Iran report 7 and 12 deaths each. The very real risk is that global GDP growth will fall below 0% for the first quarter and throw off estimates for the entire year. There have already been a number of downgrades from key S&P 500 companies, expect this trend to accelerate the longer the virus threat persists. South Carolina’s port system is reporting a sharp drop in deliveries that will hurt the state’s revenue this year. Add in the impact to the business supply chain and the threat of economic spillover becomes very real.

Stocks Making Headlines

United Airlines and MasterCard are the latest to issue warnings due to the virus. Both companies say the economic impact will be a drag on full-year revenue. Although business fundamentals are sound, a slowdown in cross-border travel, consumer and business spending is in process. United Airlines is down about -0.40% while MasterCard fell a more robust -2.0%. Chipmaker Micron is also moving lower, down about -1.0%, after it received a downgrade to underperform.

Home Depot is moving higher in early trading. The home improvement company beat on the top and bottom lines. The company CEO says investments in the company’s future are paying off. Shares are up 3.0%. Shares of Moderna are also on the move, up more than 15%, after the company shipped a coronavirus vaccine for Phase 1 trial. Moderna uses RNA technology to force human bodies to create their own medicines.

Economic Data Is Sparse

Today’s economic calendar is sparse. The only major release for U.S. markets is the Consumer Confidence figures due out later today. With the coronavirus weighing on global outlook this data will be more important than ever. The consumer has long been a driver of the U.S. economy, if cracks begin to appear the market correction could gain momentum.

Equities Plunge, Coronavirus Spreads, A Major Correction Has Begun

The U.S. Futures Are Down Sharply In Early Trading

The U.S. futures market is down sharply in early trading. Market participants have begun to understand the scale of disruption the spreading coronavirus will have on economic activity. The Dow Jones Industrial Average, S&P 500 and NASDAQ Composite are all down -2.5% to -2.75% in early trading.

The cause, news the coronavirus is not only spreading but gaining traction in areas outside of China. South Korea says the number of cases there has jumped to over 750. South Korea’s response was to raise its safety warning to the highest level. Elsewhere, the number of infected is growing in Italy and Iran. China says the number of deaths has topped 2,500 within its own borders. The last estimates for Q1 growth were near 0.0% due to viral impact but the risk is much greater. First-quarter growth is likely to come in below zero and the rebound expected later in the year is highly questionable.

Stocks On The Move

Oil and gold are among today’s biggest movers. Oil prices fell nearly -4.0% because spreading economic impact means declining demand or oil. Today’s move confirms resistance at a key technical level and may point the way to deeper declines later this quarter. Gold prices shot up nearly 2.0% and are headed up to retest the all-time high. Traders around the world are flocking into safe havens and are likely to drive the precious metal to new highs very soon.

Airlines, gaming, and travel stocks are leading equities lower. Shares of Las Vegas Sands, Wynn Resorts, and MGM are down -3 to -7.0%. Delta and American Airlines are both down about -5.25%. Chipmakers are not immune, Nvidia and Intel are both down as well, Nvidia leads with a loss of -6.0%. Apple and its supply chain are also being hit hard with losses in the range of -4.0% to -6.0%.

The U.S. Economy Is Still Strong

Words of encouragement from Warren Buffet did not assuage the market’s anxiety. He says the U.S. economy is still on fine footing and the data supports that view. Today’s economic calendar includes the Chicago National Activity Index which rose in January. The index came in at -0.25 from last month’s -0.51 showing an increase in overall activity and activity in line with long-running trends. Three of the four sub-indices improved but only one turned positive, the new orders. Traders should focus on new orders because it is a leading indicator of future activity.

Equities In Retreat, GDP Growth In Danger, Fed Downplays Rate-Cut Outlook

The U.S. Futures Are Moving Lower

The U.S. futures are indicating a mildly lower open on Friday. The move comes a day after U.S. equity markets experienced an unexpected and deep intraday pullback. The pullback, most likely caused by a growing fear of the coronavirus, countered a new all-time high in the broad market and threatens to spark a deeper correction. The number of deaths in China has risen in the last 24 hours and signs are emerging the virus is still spreading. China now reports outbreaks within its prison system while South Korea says its confirmed cases are spiking.

Traders are becoming more and more concerned about 1Q GDP and EPS growth. The consensus is the virus will hold GDP growth at 0.0% for the 1st quarter and that will assuredly have an impact on Q1 EPS growth. Looking at the Chinese data, sales of autos fell more than 92% in the first two weeks of February signaling the impact on economic activity could be quite severe. The good news is that, once the epidemic has passed, GDP and EPS growth are expected to rebound.

Wall Street Is Still Bullish On Domestic Equities

In corporate news, earnings and upgrades are the news of the day. On the earnings front, Deere & Co, First Solar, and Dropbox are the big movers of the day. Deere & Co reported better than expected top and bottom-line results that pleased investors. The news was accompanied by a favorable outlook for the U.S. farming market that has shares up 10.5% in premarket action. Shares of Dropbox are also moving higher, up 12.5%, after it reported better than expected results. The file-sharing company also raised guidance and initiated a share buyback program.

Shares of Chewy got a boost this morning when analysts at RBC upped their rating on the stock. According to them, Chewy has highly favorable risk-reward profile based on revenue and margin expansions. At the other end of the spectrum, shares of First Solar are moving lower following its weaker than expected report and unfavorable guidance. In other news, shares of Coca Cola are holding flat after the company warned Q1 EPS could be hurt as much as $0.02 per share due to the coronavirus outbreak.

Flash PMI And Existing Home Sales Due Out Late In The Morning

Flash PMI readings and Existing Home Sales data are due out later in the morning. The PMI, both manufacturing and services, are expected to hold steady if not advance from the last month. Readings on activity in NY and Philadelphia were both much hotter than expected earlier this week. On the housing front, existing home sales are expected to fall slightly from the previous month but remain above 5 million annualized units.

Equities Fall, Risk of Correction Grow, Oil Prices In Reversal

The U.S. Futures Are Down In Early Trading

The U.S. index futures are pointing to a lower open in the Thursday session. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all down about -0.15%. Traders are cautious after the S&P 500 hit a new all-time due to the increased risk of a virus-related market correction. China reports the number of confirmed cases has topped 74,500 with 2118 dead on the mainland. South Korea reports that its cases are spiking despite containment efforts across the region.

A number of companies have issued revenue warnings because of the virus impact on global trade. Today’s news includes statements from air-carrier Air France and global shipping giant Maersk. Air France describes the impact as “brutal” while Maersk told its investors volumes and traffic will be significantly lower than expected.

Investment banker Goldman Sachs says the market is underestimating the fallout from the epidemic and I think they are right. At current levels, the S&P is trading nearly 19X forward earnings with consensus estimates in decline. At the current pace of decline, the 1st quarter earnings cycle will most likely result in negative EPS growth for the broad market.

Domino’s Surges On Results, Dividend And Guidance

In earnings news, shares of Domino’s Pizza are up nearly 20% after the delivery company reported earnings. EPS and revenue were well above the consensus estimates, the company issued a favorable outlook for the coming year and raised the dividend. Shares of Stamps.com are also on the move, gaining more than 35% after reporting solid revenue and earnings this morning.

At the other end of the spectrum, ViacomCBS and Aaron’s are both moving lower. ViacomCBS reported merger expenses were dragging on results and that sent shares down by -8.0%. Aaron’s, a rent-to-own furniture and electronics chain, reported mixed results and saw its shares move lower as well.

Economic Data Comes In Strong

The day’s economic data came in strong and suggests the market is wrong about FOMC policy. Initial claims came in at 210,000 and as expected. Initial claims are trending at historical lows and are consistent with healthy labor markets. Continuing claims and total claims also fell in this week’s data.

On the manufacturing front, the Philadelphia Federal Reserve’s MBOS came in much hotter than expected. The headline figure rose 20 points to 36.7 and a three-year high. Data within the report shows new orders, deliveries, backlogs, and employment all rose. The Empire State Manufacturing Survey is equally strong indicating a vigorous rebound in U.S. manufacturing this year.

 

Equities Rebound, Adidas Warns China Business Suffers, Housing Data Is Hot

The U.S. Futures Are Higher In Early Trading

The U.S. futures are moving higher in early Wednesday trading. The NASDAQ Composite advanced 0.50% to lead the market while the Dow Jones and S&P 500 both advanced 0.30%. The moves are driven by a round of better than expected earnings and dubious sign the spread of coronavirus in China is slowing. On the health front, Chinese officials report over 100 new deaths bringing the total to over 2,000. The number of new cases slowed from the previous day but still topped 1,000 infected.

The risk for markets remain despite the slow reopening of China’s industrial centers. In today’s news, shoe-maker Adidas reported its business in China was down more than 85%. Because China is a major manufacturing hub for the world’s shoe suppliers this could impact Adidas revenue in the coming quarters. Shares of the stock, listed on the OTC market board, are flat in the premarket.

Earnings Surprises Lift Market

A round of better than expected earnings is helping to lift sentiment in early trading. Shares of Garmin, Analog Devices, Genuine Parts Company, and Sonic Automotive are all moving higher following the release of their reports. Analog Devices is in the lead with an advance of 5.0%. The company reported a narrow miss on the top line but smashed consensus targets for EPS. Analog Devices also provided better than expected guidance adjusted for the impact of coronavirus.

Shares of technology-maker Garmin are up 4.5% in the premarket. It beat on the bottom line and raised full-year guidance. Sonic Automotive beat on the top and bottom line sending its shares up more than 3.5%. The only negative in this report is the company did not raise its dividend as expected. In other news, shares of Nvidia are also moving higher following Bernstein’s upward revision to its price target.

Economic Data Is Hot

Today’s economic data is hot. The headline Housing Starts number is negative but comes with many caveats for traders to consider. The first is that analysts had expected a decline of -11% so -3.6% is quite a beat. The second is that January’s figure was a blow-out so a little give-back isn’t bad. The third caveat for traders is that January’s figure was revised up to 17.7% leaving the YOY gains firmly in positive territory.

On the inflation front, PPI came in hot at the headline and core levels. Headling PPI rose 0.5% over the last month and is up 2.1% YOY. This is in-line with the FOMC’s view that current policy is appropriate. Traders looking for a dovish sound FOMC in today’s minutes may be disappointed. The FOMC minutes are due out this afternoon at 2 PM.

Apple Guides Lower, Coronavirus Still Spreading, U.S. Equities Fall

The U.S. Futures Are Lower In Early Trading

The U.S. futures are pointing to a lower open on Tuesday following a revenue warning from Apple. Apple says it is going to miss its previously stated guidance of $63 to $67 billion for the 1st quarter. The reason is the coronavirus. The world’s leading manufacturer of consumer electronics says production and sales are taking a hit in China. With production slowing sales will be impacted around the world. Shares of Apple are down about -2.5% in early trading after shedding more than -3.0% in the overnight session.

The Dow Jones Industrial Average is down about -0.55% while the S&P 500 a smaller -0.41%. The tech-heavy NASDAQ Composite with its exposure to China is leading with a loss of -0.60%. This week is a holiday-shortened week, today’s action is the first since the market closed last Friday. On the coronavirus front, China has announced another 1900 new cases and nearly 100 deaths. Among the dead are healthcare workers and the head of a major treatment center. In total, there are 72,350 cases worldwide and the number continues to grow. The full impact on the global economy will not be known for many months so traders should be cautious.

Earnings Season Still In Full Swing

With nearly 80% of the S&P 500 reports in the bag, the earnings season is winding down. Even so, there are still a number of market-moving releases left to come. Today’s news includes reports from Walmart, Advance Auto Parts, and Bloomin Brands. The results for all three are mixed.

Walmart reported a miss on the bottom line along with weaker than expected comps. The stock fell -1.0% on the news and then rebound to advance 1.0% before the open of the day’s session. The consumer giant raised its dividend and provided a stable outlook which was enough for the market. Advance Auto Parts also reported mixed results. The after-market auto parts store missed on the top line but delivered a solid bottom-line beat. Shares are up 2.0%, partially driven by a 300% increase to the dividend.

Economic Data Is Positive

The Empire State Manufacturing Survey came in hotter than expected. The headline reading of 12.9 is 8 points higher than the previous month. An uptick in new orders and shipments are the primary drivers although employment, backlogs, and delivery times all rose too. Later in the session traders will be watching for the homebuilder’s sentiment index due out at 10 AM. The most important read of the week will be tomorrow afternoon when the FOMC releases the minutes from the last meeting.

Equities Edge Higher, Strong Earnings Support Market, Coronavirus Spreads

The U.S. Equities Indices Are Higher In Early Trading

The U.S. equities futures are pointing to a slightly higher open on Friday. Trading sentiment is buoyed by a round of better than expected earnings from names like Nvidia, Newell Brands, and Canopy Growth Corp. Despite the earnings, the shadow of China’s coronavirus outbreak remains over the market. China reported 121 new deaths and nearly 5,100 new infections since yesterday’s report. The new deaths include numerous medical workers suggesting the virus is far more contagious than first understood.

The NASDAQ Composite is in the lead in the early premarket session. The tech-heavy index is up nearly 0.30% compared to a 0.18% advance for the S&P 500 and 0.18% increase for the Dow Jones Industrials. Traders should note, while the major indices are pushing to new all-time highs the Dow Jones Transportation Average has yet to break out. If Dow Theory holds true, the transports must confirm the new highs else the broader market is doomed to correction.

Earnings Are Better Than Expected

Nearly 80% of the S&P 500 have reported earnings so far this cycle and the results are better than expected. The broad market is looking at EPS growth in the range of 1.0%, far better than the -2.0% predicted just before the cycle started. Today’s news includes reports from consumer products company Newell Brands among others.

Newell Brands reported better than expected top and bottom-line results. The bad news is net revenue fell on a YOY basis and the guidance for 2020 is weak. Shares are flat in early trading. Nvidia, on the other hand, beat expectations and gave positive outlook sending shares up more than 6.0%. Strength was driven by data center demand that is in turn driven by the growing cloud-computing industry.

Canopy Growth Corp reported better than expected earnings and sent its shares up more than 20%. The Canadian cannabis giant says revenue grew nearly 50% on a YOY basis and smashed the consensus estimate.

Economic Data Good But Not Great

Today’s economic calendar includes Retail Sales and Import/Export Prices. On the inflation front, import and export prices came in better than expected. The import price came in unchanged versus an expected drop while export prices rose 0.7%. The data shows global demand is accelerating and that bodes well for 2020 GDP. In retail news, Retail Sales rose 0.3% as expected and up 0.4% at the core level. Core retail sales are a tenth better than expected. While good, the data offset by revisions to the previous month’s data.

Equity Futures Plunge, Coronavirus Spread Accelerates, Earnings Still In Focus

The Futures Are Down In Early Trading

The U.S index futures are down in early trading following news out of China. China revealed the number of new cases of coronavirus surged by 15,000 overnight, primarily due to a new clinical test. The number of deaths also surged, up 254 since yesterday, raising the stakes in terms of potential for global economic impact.

With China’s manufacturing hub of Hubei province shut down, it is certain the world’s supply chain will feel the effects of this outbreak for months to come. The tech-heavy NASDAQ Composite, with its heavy exposure to China and Asia, is in the lead with a loss of -0.95% while the Dow Jones and S&P 500 are both down about -0.80%.

Earnings Are Still In Focus

In stock news, a raft of corporate earnings came out this morning including reports from Cisco, Pepsi, AIG and Applied Materials. Cisco is the headline of the day. The company reports another decline in revenue and a shortfall compared to estimates that have the stock down more than -5.0% in early trading. Shares of Pepsi are edging higher in the early morning session. The global supplier of beverages and snacks beat revenue estimates on better than expected organic sales growth.

Shares of AIG are among the days winners. The stock reported a return to underwriting profit growth and sent the stock up more than 2.0%. Shares of consumer staple Kraft are edging lower in the early session after reporting mixed earnings. The company fell short on revenue due to a decline in organic sales but beat on the bottom line. Shares are down about -0.40% on the news. In other stock news, shares of Tesla are moving lower by 4.0% after hitting all-time highs in the last week. The company revealed plans for a $2 billion stock offering that is going to greatly dilute shareholder value.

The Economy Is Still In Good Shape

Today’s economic data confirms the message sent to Congress by Fed Chief Jerome Powell; the economy is still in good shape. On the labor front, the jobless claims figures fell by -2,000 to 205,000 and remain near historic-low, consistent with healthy and tight labor conditions. On the inflation front, CPI came in at 0.1% and a tenth shy of expectations. At the core level CPI rose 0.2% and as expected while the YOY comparisons came in at 2.5% and 2.3%.

Equity Markets Rise, Economy In Good Place, Viral Impact Remains An Unknown

The Futures Are Pointing To A Higher Open

The U.S. index futures are pointing to a higher open on Wednesday following new all-time highs set in the previous session. The move is largely earnings-driven despite the unknown impact of China’s coronavirus. China reported 97 more deaths in the overnight session, the total number of cases now tops 44,000. The pace of spread appears to be slowing but the virus is not fully contained. Singapore reported this morning another case and line of infection has been found there. The NASDAQ Composite is leading the charge with a gain of 0.55% while the Dow and S&P 500 trail with gains near 0.45%.

Shares of gaming and airline stocks are leading today’s action. Wynn Resorts and Las Vegas Sands are both up more than 2.0% due to their heavy exposure to China. Airlines are up a more tepid 0.5% to 1.0%. In earnings news, shares of Lyft fell -5.2% after reporting strong earnings and weak guidance. The company sees growth slowing in 2020, not something the market likes to hear. Shares of CVS, Coors, and Teva are all moving higher in the premarket after reporting better than expected earnings.

Earnings Season Still In Focus

CVS lags the group with an advance of 2.5%, the integrated healthcare company beat on the top and bottom line and posted a high single-digit increase in prescription volume. Teva Pharmaceuticals saw its shares rise by about 3.4% in the premarket session due to signs its turnaround plans are working. EPS is up more than 100% on a YOY basis with a positive outlook for 2020 growth.

Molson-Coors leads today’s earnings news with its gain of 3.6%. The beermaker has made a push to premiumization that is driving top and bottom-line results. so far, about 70% of the S&P 500 has reported for the 4th quarter with more than 70% of them beating consensus. The caveat for traders is that the pace of outperformance is below the historical averages and the outlook for future growth continues to see downward revisions.

The Economy Is In A Good Place

Jerome Powell dominates the economic calendar this week with his testimony to Congress. According to the Fed Chief, the U.S. economy is in a good place. The committee is watching the coronavirus outbreak for potential spillover into the U.S. economy but does not rate it a major risk. The committee also expects current monetary policy to be appropriate for the foreseeable future.

There is no data due out today but some important releases will come out on Thursday and Friday. Tomorrow, the all-important CPI is expected to hold steady at 0.2%. On Friday, traders will be watching for signs of consumer health in the Retail Sales figures.

 

 

Equities Rise, Coronavirus Fears Ease, China GDP Growth In Peril

The U.S. Indices Edge Higher In Early Trading

The U.S. futures market is edging higher in the early premarket session as traders continue to monitor the coronavirus situation. The S&P 500 is lagging in today’s action, up only 0.30%, while the Dow Jones Industrial Average and NASDAQ Composite are both up about 0.45%.

Today’s moves come just a day after the broad market set a new all-time high despite concerns the coronavirus outbreak will drag on global GDP growth. China confirms the number of deaths has risen to 1016 with more than 42,600 infected. The WHO reports the number of new cases is at its lowest levels since the first weeks of the outbreak showing the rate of spread is slowing.

In stock news, shares of Under Armor are down -11.0% after the company disappointed investors. Revenue and earnings were more or less in line with consensus but guidance a was weak where competitor Lululemon has raised its guidance twice since last reporting. Shares of Autonation are up 9.0% after it reported better than expected results. Sales of new cars were flat from last year but sales of used cars jumped 12.5% to drive profits and improving margins.

EU Indices Move Higher At Midday

The EU equity indices are moving higher despite concerns China’s viral outbreak will drag on GDP. China is a vital step in the global supply chain, any disruption to shipments and deliveries is going to cause a chain reaction throughout the economy. The DAX is in the lead with a gain of 0.88%, the FTSE is up 0.80% and the CAC is trailing at 0.42%.

In stock news, shares of Geely and Volvo are both moving higher after the two announced a merger. The combined company will be listed on both EU and Hong Kong exchanges. Shares of Daimler are down -1.0% after the company reported an unexpected loss.

Asia Moves Higher Despite GDP Warning

Asian equity indexes finished the day higher despite a warning about GDP. Economist expect the coronavirus outbreak to shave at least 1.0% from 2020 GDP and the figure is sure to move higher. While there has been some news about reopening businesses much of China’s economy remains closed. The Hong Kong Hang Seng led today’s move with a gain of 1.26%, the Kospi comes in second with a gain of 1.00%. Others in the region advanced 0.40% to 0.65%, Japan was closed for a holiday.

Global Markets Edge Lower, Coronavirus Fears Linger, Chinese Inflation Spikes

The U.S. Market Is Mostly Flat In Early Trading

The U.S. market is mostly flat in early trading as investors fret over the spreading coronavirus. The number of infected has risen to 40,170 while the death toll exceeds that of SARS. Over the weekend, Chinese President Xi Jinping pledged his country to fight the disease and that lent some support to the equities market. The Dow Jones Industrial Average is leading the losses down -0.12%. The S&P 500 and NASDAQ Composite are both down about half that amount.

In stock news, attention is focused on the potential economic impact of the coronavirus outbreak. Chinese factories are supposed to reopen on Monday but the announcement may be more symbolic that not. Most businesses are expected to remain shuttered and may disrupt the global supply chain. The province of Hubei, where the virus originated from and the most heavily hit, is a major manufacturing center.

Restaurant Brands, the owner of Popeyes, beat on the top and bottom lines. The company’s so-called “chicken” war with Wendy’s and Bojangles helped pad the company’s results. Shares are up 2.0% in the premarket. Shares of Allergan are also moving higher in the early session after it beat on the top and bottom line.

EU Equities Move Lower

The EU equities market is moving lower at midday. The coronavirus and its impact to global supply chains is the primary reason. The CAC is down about -0.45% while the DAX and FTSE trail with losses of -0.38% and -0.28%. With China as its biggest trading partner, the EU is especially vulnerable to disruptions within the Chinese economy.

In stock news, embattles NMC Health is moving higher after it revealed approaches from two private equity firms. The company is still ensnared with a legal battle versus short-sellers claiming bad accounting practices. In other news, people close to NMC are under review for misreporting their disclosures. Shares of Daimler are flat at midday after the company announced job cuts and other cost-saving efforts. Exor is moving higher by 5.5% after it announced the possible divestiture of PartnerRE.

Asia Mostly Lower, Virus Causes Inflation To Surge

Asian markets are mostly lower at the end of Monday’s session. The Nikkei and Hang Seng are both down -0.60% while the Kospi and ASX post smaller losses. The mainland Shanghai Composite is the only index in the green, up 0.51%, after sentiment was buoyed by Xi’s pledge. On the economic front, Chinese CPI surged to 5.4% YOY and set a long-term high. The surge is due in part to the virus as well as high pork prices.

Global Markets Retreat, Recession Fear Reemerges, Labor Data Beats

The U.S. Futures Are Moving Lower

The U.S. index futures are pointing to a lower open on Friday snapping a 4-day winning streak. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all down about -0.30% in the premarket session. The move is driven by renewed fears of economic recession, fears that have been stoked by the coronavirus outbreak. So far, more than 28,000 people have been infected with nearly 650 dead. Businesses around the world are shuttering their Chinese operations in an effort to contain the spread. Unfortunately, this is aiding a slowdown in China that could infect the rest of the global economy.

On the economic front, U.S. Non-Farm Payrolls came in much stronger than expected as warmer weather spurred hiring in key areas. The headline 225,000 new job creation was accompanied by upward revisions to the previous two months and an uptick in labor force participation. On the earnings front, wages grew 0.25% in the month and are up 3.1% YOY. In stock news, shares of Nestle are moving higher following its EPS report. The candy maker beat top and bottom-line consensus estimates and upped it divided more than expected.

European Markes Are Lowe At Midday

The EU indices are lower at midday as they track Asian markets lower. The FTSE is in the lead with a decline of -0.61% while the DAX is down -0.55% and the CAC -0.32%. Aiding the decline is a downgrade to Chinese GDP outlook. Analysts are now looking for a 5.0% GDP growth in 2020, down 0.7% from the previous consensus estimate. In other economic news, the German Industrial Output figure for January was -3.5% and well below the consensus.

Share of Credit Suisse are among the most active in today’s session. The Swiss banking giant’s CEO has decided to step down amid a spying scandal. Shares of the stock fell more than -2.0% in early trading but clawed back some of the loss by midday. Shares of Lorcal are also moving but in the opposite direction. the company reported a better than expected revenue increase for the 4th quarter and sent the stock up 0.80%.

Asian Mixed, Shanghai Moves Higher

Shares in Asia are mixed at the end of the session on Friday. The Shanghai Composite is the only index to post a gain for the day and that 0.33%. Others in the region posted losses in the range of -0.19% to -0.72% led by the Korean Kospi. Korean shares were hurt by news out of the automaker industry pointing to reduced production and delays related to the Chinese viral outbreak. Casino’s are also moving lower, more than -1.0% on average, after Macau shut down its gaming industry in an attempt to further stop the spread of coronavirus.

China Cuts Tariffs, Risk Assets Move Higher, Coronavirus Risk Remains

The U.S. Futures Are Up In Early Trading

The U.S. futures are up in early trading following news China is cutting tariffs. China’s Ministry of Finance announced overnight that it would cut tariffs on $75 billion worth of U.S. goods by 50%. The cut will take effect next week and are intended to advance the healthy and stable development of trade. The Dow Jones Industrial Average, NASDAQ Composite, and S&P 500 are all up about 0.40% in the premarket session.

Meanwhile, traders are still eyeing developments related to the coronavirus outbreak. The death toll has risen near 600 with more than 28,000 cases. Companies like Tesla and Disney are shuttering operations and warning of a significant impact on first-quarter earnings. The risk for traders now is in the economic impact of the virus since it appears containment is working. The question that needs to be answered is how long China’s economy will be shut down and if the virus will reappear once China goes back to work.

In stock news, shares of Tyson and Kellog are both down hard in early trading after reporting weaker than expected results. Kellogs leads with a loss of -6.0% after offering weak guidance, Tyson is down about half that on poor results. In other news, Bristol Meyers is up 3.0% after it beat top and bottom-line estimates. On the economic front, jobless claims fell more than expected and are hovering just above the long-term low. Fourth-quartervproductivity and labor costs rose less than expected at 1.6% apiece.

European Markets Are Up At Midday

The European indices are broadly higher at midday following the positive trade development. The reduction of tariffs on U.S. goods will help free up trade on a global basis as the supply chain becomes unburdened. Europe’s benefit will come in the form of increased trade with China, its largest trading partner, when (if) China’s economy reaccelerates. The DAX and CAC are both up about 0.65% while the FTSE is up about half that.

In other news, the meeting of OPEC+ has been extended for another day. The meeting is expected to end with a production cut intended to support oil prices. WTI and Brent are both hovering near long-term lows waiting for the decision. In stock news, shares of banks are in the lead following earnings from Soc Gen. The lender missed estimates but announced a new buyback plan that sent its shares up 1.2%. Deutsche Bank is leading the group with a gain of 9% after Capital Group revealed a 3% stake.

Asian Markets End Higher In Thursday Trading

Asian markets are broadly higher on Thursday following the trade tariff news. Mainland Chinese stocks surged the most with the Shenzen component of the Shanghai Composite advancing nearly 3.0%. The Shanghai Composite is up 1.72%. The Japanese Nikkie, Hang Seng and Kospi advanced 2.38% to 2.88% while the ASX gained a more tepid 1.0%. Trading in Australia was hurt by weaker than expected December retail sales figures.

 

Equities Rise, Job Creation Surges In January, EU Data Surprises

The U.S. Futures Are Higher In Early Trading

The U.S. futures are indicating a higher open in early Wednesday trading. The move is driven by better than expected earnings and a shot of good news out of China. Unconfirmed reports from within China say researchers have found a viable treatment for the Novel Coronavirus. If true, it could mean a quick end to the rapidly spreading outbreak. There are now over 25,000 cases globally with nearly 500 dead. The World Health Organization issued a statement to counter the news stating there is no known treatment for this disease.

The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are indicated to open about 0.70% higher. In stock news, shares of Disney are fractionally higher in the premarket action. The global entertainment giant beat consensus estimates for 4th quarter earnings but warned the coronavirus could impact revenue by $175 million. Shares of Ford are moving lower after the iconic automaker missed expectations and gave weak guidance for the coming year.

On the economic front, the ADP employment report far surpassed expectations. The headline figure of 291,000 was nearly double the consensus and showed broad gains in labor. Later in the session traders will be looking for the final read on January PMI and services sector ISM.

European Markets Move Higher

The EU indices are broadly higher at midday on Wednesday. The DAX is in the lead with a gain of 1.45% following better than expected PMI data. The EU Composite PMI came in at 51.3 and a five-month high while in Germany it came closer to 55. The CAC is up about 1.10% while the FTSE is up 0.75%. Autos are among the biggest gainers with average advances greater than 2.0%.

In stock news, shares of lender BNP are moving higher after the company reported results. Quarterly revenues were better than expected but guidance was a bit weak but not as weak as some had thought. Danske Bank reported flat revenue and EPS but warned this year would not be so good. Shares fell -0.90% on the news. Infineon is among the days biggest movers with a gain of 9.25% following it’s EPS beat and guidance upgrades.

Asian Markets In Rebound Mode

The Asian markets are broadly higher on Wednesday as improving sentiment drives market action. The Shanghai Composite is today’s leader with a gain of 1.25% while the Nikkie follows close behind. The Hang Seng, ASX and Kospi all posted gains in the range of 0.40%.

The biggest news in the region is the coronavirus. Business and travel continue to be impacted and new closings were announced today. Hyundai is only one major manufacturer to shutter its plant. The PBOC injected $242 billion of liquidity into the system over the last two days in an attempt to counter the impact of the virus.

Equities Rebound, Coronavirus Fears Ease, China Plans Stimulus

The U.S. Futures Are Up In Early Trading

The U.S. index futures are up in early trading pointing to a solidly higher open for the equity markets. The Dow Jones Industrial Average and S&P 500 are both up about 1.25% while the NASDAQ leads them higher. The tech-heavy NASDAQ Composite is up 1.50% aided by strength in Tesla. Shares of Tesla surged another 13% in early action following Monday’s near-20% gain. The electric car maker has received another round of analysts upgrades with price targets in the $800 range.

In health news, the coronavirus death total is not over 425 with the first reported death outside of mainland China. A man in his thirties was reported to have succumbed to the virus in Hong Kong. There are now over 20,670 known cases.

In earnings news, shares of Google parent Alphabet are down more than -3.0% in early trading. The Internet giant reported mixed results on weaker than expected ad revenue. Shares of Ralph Lauren are up more than 6% after the fashion brand beat consensus estimates. Royal Caribbean also saw its shares move higher after beating on the top and bottom line.

EU Markets Rise, Brexit Drama Begins To Heat Up Again

The EU markets are broadly higher at midday despite signs of a contentious Brexit negotiation period this year. The DAX, CAC and FTSE are all up about 1.4% at midday. On Monday, the EU and UK laid out their respective goals for the final Brexit negotiation and obvious hurdles have already arisen. On the brighter side, there are also some notable areas of common ground.

In earnings news, shares of AMBU are up 20% after reporting results. The health product company saw an unexpected double-digit rise in quarterly earnings. Shares of Micro Focus are moving in the opposite direction after its chairman resigned citing difficult conditions. Iconic beer-maker Carlsberg reported inline with expectations but gave favorable guidance and shares rose 2.8%.

Asian Markets Rebound In A Session of Cautious Trading

Asian markets rebound in Tuesday’s session although there was an air of caution. the Korean Kospi led with an advance of 1.84% while markets in China and Hong Kong gained about 1.30%. The Nikkei and Australian ASX saw smaller advances but still posted gains. In Australia, the RBA decided no policy change was needed. The RBA’s governor says an extended period of low rates is needed to bring the nation to full-employment.

Equities Rebound, Coronavirus Spreads Further, Earnings Season In High Gear

The U.S. Futures Are Up In Early Trading

The U.S. futures are up in early trading as equities appear to be rebounding from last week’s plunge. While early action is bullish, traders are warned to be cautious, the black swan coronavirus event is not yet over. China now reports more than 360 deaths as the number of infected continues to rise. The first death outside of China was reported over the weekend as well, this one in the Philippines. The NASDAQ Composite is in the lead with a gain near 0.60% while the Dow Jones and S&P 500 are both up about 0.55%.

In other news, there are a number of potentially market-moving events slated for the week. Topping the list is the first Democratic Primary in the 2020 Presidential Election. Bernie Sanders has unexpectedly risen to rival front-runner Joe Biden putting extra importance on the evening’s results. If Bernie Sanders emerges as the new front-runner equity markets could pull back sharply. Also on tap, another week of peak earnings. This week look out for reports from Google, Costco, and Conoco-Phillips. On the economic front, ISM figures for January are expected at 10 AM.

Europe Cautiously Higher, Brexit Phase 1 Is Complete

The European indices are moving higher at midday on Monday. The FTSE is in the lead with an advance of 0.45% following the smooth phase 1 Brexit last Friday. The UK now has 11 months to negotiate a full deal with the EU, based on the last round the negotiations are certain to be difficult. The French CAC is up about 0.40% while the DAX trails at 0.25%.

In stock news, shares of Ryanair are up 5% at midday after the company reported quarterly results. The air carrier reports better than expected top and bottom line income and upped its full-year guidance. At the other end of the spectrum, Shares of Julis Baer are down nearly -6.0% after it missed results and announced a new cost-cutting review. On the economic front, EU manufacturing PMI came in at 47.9 and the highest level in 9 months. The downside is that activity continues to contract.

Asian Markets Lower, China Re-opens And Falls 8%

Most indices in Asia closed lower on Monday and led by China. China’s markets reopened for the first time since the start of the Lunar New Year holiday and fell -8.0%. The decline is large but less than feared. Elsewhere in the region, losses were led by the ASX 100 and its decline of -1.24%. In economic news, the Chinese Caixin small-cap PMI came in at 51.1 and shows expansion within the economy. The bad news is that PMI came in weaker than expected and down from the previous month.

Global Markets Edge Lower, Coronavirus Still Centerstage, Mixed Data Clouds Sentiment

The U.S. Futures Are Dow In Early Trading

The U.S. futures are indicating a lower open for the major indices in early Friday trading. The Dow Jones Industrial Average and S&P 500 are both down about -0.40% in the premarket session, the NASDAQ Composite about -0.30%. Sentiment is dampened by the coronavirus outbreak that continues to spread. There are now 9700 confirmed cased globally with the first two showing up in India. The number of deaths has risen to 213 and is expected to rise.

Aside from the risk to global health, traders are concerned about the risk to the global economy. China has already clamped down on travel and other countries are doing the same. yesterday, the WHO declared a Global Health Emergency so we can expect travel to be curtailed globally. Companies like Starbucks and Caterpillar are already warning investors about possible impact to earnings and other risks.

In earnings news, Amazon smashed expectations for revenue and earnings. The company reports solid increases in YOY sales and notable strength in the Amazon Web Services segment. Shares are up 11.0% on the news. Caterpillar also reported better than expected earnings but shares fell when it warned investors about 2020 outlook. Inflation data shows the U.S. consumer ended 2019 on solid footing. Personal income rose 0.2% and spending 0.3% adding upward pressure to YOY comparisons.

European Markets Are Down At Midday

The EU markets are down at midday on concerns the coronavirus will continue to spread. There are now two cases in the UK as well.  The DAX and FTSE are both down about -0.35% to -0.40% while the FTSE lead with a loss of -0.75%. The FTSE is under added pressure because of today’s Brexit. After 3.5 years of political wrangling and uncertainty, the landmark event has arrived. The Brexit occurs tonight at 11 PM London time.

In stock news, basic resources and energy are leading on a sector basis with declines of -1.0%. All sectors are moving lower but today’s biggest loser is Banco de Sabadell. The bank reported a surprise loss in the 4th quarter and sent shares plummeting. At the other end of the spectrum, Danske Bank shot up by 5.7% on word the U.S. will have a hard time levying fines against it.

Asian Markets Are Mixed, China Still Close

Asian markets are mixed at the end of the day on Friday. The Hong Kong Hang Seng and Korean Kospi are both down, -0.52% to -1.35%, while the Nikkei and ASX are both moving higher. The Nikkei is the strongest performer with an advance of 0.99% on strength in tech. Shares of Tokyo Electronics are leading the surge with a gain of 2.3%. In China, official PMI figures show the manufacturing economy neither grew nor contracted in December because PMI is 50.0.