Friday Morning Options, News, Charts, Reads
- Worst Growth Since 2012
- An Early Read on 2018
- Never Apologizing About Profits
- New Focus Won’t Have A Focus
- Shaking Off Chip Flaws
- T-Mobile, Sprint Make Progress in Talks, Aim For Deal Next Week
- Bracing Investors For Bad News
- More Packages, Less Spending
- Strong Cloud Demand
- 50 Ways the World is Getting Better
- Ominous Vomiting Camel Formation
- Investors eye historic Korea summit
- Phillips tops estimates
- Organic sales light at Colgate-Palmolive
- Independent chairman at Tesla?
- BOJ removes inflation target date
- NAFTA talks continue in Washington
- U.K. growth weakest since 2012
- Rusal attempts to lift U.S. sanctions
Tweet of the morning:
Flat Yield Curve And Rising Interest Rates
— Chris Ciovacco (@CiovaccoCapital) April 27, 2018
Open Interest Changes:
Unusual Option Action:
In a historic summit today, North Korean leader Kim Jong-un and South Korean President Moon Jae-in agreed to end a seven-decade war and pursue the "complete denuclearization" of the peninsula. Beyond the geopolitics, many investors are paying attention to the talks. South Korea is critical to the global supply chain and many manufacturers are located close to the border.
The Bank of Japan kept monetary policy steady overnight and removed a phrase on the time frame for achieving its 2% inflation target. The goal has been postponed six times since it was set in 2013, when BOJ Governor Haruhiko Kuroda took office. Leaving policy unchanged also shows the bank's willingness to stick with its radical easing program while the Fed continues to hike rates.
Data released over the coming week will yield a health scorecard for the U.S. economy. The fun starts today with GDP data, expected to show growth of 2% in Q1, as well as the employment cost index. Next week traders will digest personal consumption expenditures, a Treasury refunding announcement and the nonfarm payrolls report for April.
NAFTA talks will resume this morning for a fourth consecutive day as Mexico said a new agreement was "reasonably close," but talks to arrive at a finishing point were "not easy." Complicating matters, the Trump administration has threatened to impose sanctions on Canadian and Mexican steel and aluminum on May 1 if not enough progress has been made on the deal.
Britain's economy grew by just 0.1% in the first quarter, its weakest pace since 2012, amid heavy snow in late February and early March, dubbed "the Beast from the East," which was already known to have hurt some businesses. The scale of the slowdown may unsettle the BOE, which meets next week to consider raising interest rates for only the second time since the 2008 financial crisis.
A Eurogroup meeting today in Sofia, Bulgaria, is expected to discuss Greece's key demand of debt relief and the conditions it must fulfill as the country rushes to end its third bailout program in August. The main goal is for a debt deal to be agreed upon in order to satisfy the IMF and help bridge the gap with Northern European countries that want relief measures linked to strict supervision.
Following the pomp that surrounded the state visit of French President Emmanuel Macron, Angela Merkel's visit to the White House will be scaled down to a "working session." The German leader will have three hours with President Trump, compared to the three days her French counterpart spent in Washington. Trade ties and tariffs are likely to dominate the discussions, as well as the Iran deal and Berlin's military spending.
Strong Q1 results were seen at Amazon (NASDAQ:AMZN) as the retail giant topped $1B in profit for the second straight quarter, boosting shares over 7%in after-hours trading. The company attributed the gains to its cloud services division and advertising business. Amazon also announced it would also increase its annual Prime membership from $99 to $119, as well as renewing its streaming partnership for Thursday Night Football.
European earnings roundup: Airbus (OTCPK:EADSY) shares fell 1% in France overnight after Q1 profit was hit by engine delays, while the planemaker cut A330 output. RBS -3.5% premarket as first-quarter earnings more than tripled, but loan growth struggled. Sanofi (NYSE:SNY) is 2.4% lower after missing forecasts due to weak performance at the company's diabetes unit.
Looking to restart international shipments, Russia's Rusal (OTC:RUALF) has been "in touch with U.S. authorities" with planned new measures it hopes will be enough "to be removed from the sanctions list," sources told Reuters. The steps include appointing a fully independent board, which in turn would appoint a new management team, but questions still arise if oligarch Oleg Deripaska can keep his stake.
Sprint shares climbed 7% AH following a Reuters report stating the company and T-Mobile (NASDAQ:TMUS) are aiming to clinch a merger deal as early as next week. Sprint (NYSE:S) parent SoftBank (OTCPK:SFTBY) and T-Mobile parent Deutsche Telekom (OTCQX:DTEGY) are looking at an agreement on how they'd exercise voting control together, which could allow the latter to consolidate the company on its books even if it doesn't have a majority stake.
Wynn Resorts CEO Matt Maddox is set to appear before Massachusetts gambling regulators today to highlight the company's restructured board and changed culture in the wake of sexual misconduct allegations against founder Steve Wynn. The meeting is expected to focus on whether the latter should still be legally connected to a $2.5B casino project Wynn Resorts (NASDAQ:WYNN) is building outside Boston.
As American consumers abandon passenger cars in favor of higher-margin, more comfortable pickup trucks, SUVs and crossovers, U.S. companies like Ford (NYSE:F) and GM are scaling back sedan production. That's not the case with Japanese carmakers. Toyota (NYSE:TM) just announced that it will invest $170M in an existing plant in Mississippi to build its next-generation Corolla.
Southwest Airlines has firmed up an order for 40 Boeing (NYSE:BA) 737 MAX jets worth $4.68B at list prices, extending its lead as the world's largest operator of 737s. Southwest (NYSE:LUV) also warned that the consequences of a mid-air engine explosion last week will weigh on Q2 bookings and that inspectors are looking beyond fan blades in their investigations of the midair failure.
Confirming earlier reports, Fujifilm (OTCPK:FUJIY) and Xerox (NYSE:XRX) have reopened talks about their $6.1B merger agreement. It follows pressure from major shareholders Darwin Deason and Carl Icahn, who oppose the deal and feel Xerox could have gotten better terms. Deason even filed a lawsuit this month alleging CEO Jeff Jacobson raced to sign the agreement and negotiated to keep his position.
GoPro CEO Nick Woodman missed out on a potential $1.2M bonus for 2017 after a disastrous year that saw weak holiday sales, job cuts and a withdrawal from the camera drone market. That left him with a "nominal salary of $1 and no target 2018 cash bonus" for this year, according to the company's annual report. GoPro (NASDAQ:GPRO) shares have fallen by more than a third YTD.
AbbVie (NYSE:ABBV) +6.1% following strong earnings.
Altria (NYSE:MO) -1.9% amid declining smokeable shipments.
Amazon (AMZN) +7.1% AH more than doubling its profit.
Baidu (NASDAQ:BIDU) +5.6% AH boosting ad sales.
Bristol-Myers (NYSE:BMY) +0.5% with Opdivo fueling growth.
ConocoPhillips (NYSE:COP) +2.9% topping estimates.
Expedia (NASDAQ:EXPE) +11% AH after strong bookings.
General Motors (NYSE:GM) +0.4% beating expectations.
Intel (NASDAQ:INTC) +5.5% AH sailing past estimates.
Microsoft (NASDAQ:MSFT) +2.4% AH riding cloud strength.
PepsiCo (NYSE:PEP) +2.1% reaffirming guidance.
Raytheon (NYSE:RTN) -1% as investors cooled on defense.
Starbucks (NASDAQ:SBUX) -2% AH struggling with sales growth.
Union Pacific (NYSE:UNP) -2.9% despite beating estimates.
UPS (NYSE:UPS) +4.3% on double-digit revenue gains.
In Asia, Japan +0.7%. Hong Kong +0.9%. China +0.2%. India +0.7%.
In Europe, at midday, London +0.7%. Paris +0.1%. Frankfurt +0.7%.
Futures at 6:20, Dow -0.3%. S&P -0.2%. Nasdaq +0.2%. Crude -0.3% to $68.02. Gold +0.2% to $1320.30. Bitcoin +0.7% to $9346.
Ten-year Treasury Yield -1 bps to 2.97%Today's Economic Calendar
8:30 GDP Q1
8:30 Employment Cost Index
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count