Tuesday Morning Reads, News, and Options
- Inflation Target Near?
- Faster Than Forecast
- Apple Is Up
- Google (GOOG) employees are planning a protest tomorrow. Fortune Report
- Boeing (BA) says some of its 737 Max safety alerts did not operate as planned. WSJ Report
- President Trump and his family have sued Deutsche Bank (DB) and Capital One (COF) to prevent them from complying with congressional subpoenas. WSJ Report
- Vodafone (VOD) found backdoors in Huawei equipment. Bloomberg Report
- HSBC (HSBC) facing new competition from upstarts. Bloomberg Report
- Tesla (TSLA) to cut prices on solar panels by 38%. NY Times Report
- Iran aims to keep exporting crude oil (USO, XLE). Reuters Report
- Saudi Arabia could extend global oil deal to the end of 2019 (USO, XLE). Reuters Report
- Q1 Global semiconductor sales fell 15.5% qtr/qtr and 13% yr/yr (SMH). Digitimes Report
- Futures steady after notching fresh highs
- Vodafone found backdoors in Huawei equipment
- Eurozone economy rebounds in first quarter
- Iran vows to keep exporting crude oil
- Overnight earnings: BP, Airbus, Santander
- Tesla to slash solar panel prices - NYT
- Chinese shares rise as trade talks resume
- Trump sues Deutsche Bank, Capital One
- Samsung Electronics first quarter profit slumps
- General Electric beats by $0.05, revenue in-line
- Pfizer beats by $0.10, beats on revenue
- BP declares $0.615/ADS dividend
Confirming its full year guidance, General Electric (NYSE:GE) shares are up 7.3% premarket after reporting a more than three-fold rise in quarterly profit to $954M, helped by higher sales in its aviation, oil and gas, and healthcare units. It's big news for the prior conglomerate, which is working to turn around and simplify its businesses. Apple (NASDAQ:AAPL) will report earnings after the market close and investors are hoping the tech giant managed to reverse its iPhone slowdown. Services revenue - which could represent about 20% of Apple's sales - is also a big figure to watch, as well as the growth rate of devices like the Apple Watch and HomePod.
U.S. stock index futures are pointing to a muted open for a second consecutive session despite a jump in U.S. consumer spending seen Monday that propelled U.S. shares to a record high. The S&P 500 topped its intraday record of 2,940.91 set on Sept. 21 with a session high of 2,949.52. Investor jitters have calmed since the beginning of the year as the U.S. Federal Reserve turned dovish. Traders will see the next stage in that process today as the central bank begins its next two-day meeting.
The Shanghai Composite closed up 0.5% overnight despite another disappointing read on Chinese manufacturing, with the Caixin/Markit factory PMI for April falling to 50.2, lower than the March figure of 50.8. Boosting sentiment appears to be the next round of U.S.-China trade talks in Beijing. Enforcement mechanisms are "close to done," according to U.S. Treasury Secretary Steven Mnuchin, and the two sides hope to seal a deal by early May.
Preliminary growth data from the eurozone showed the economy grew 0.4% in the first quarter, up from 0.2% in Q4 of 2018 and up from a 0.1% figure for the third quarter. As anticipated, the Italian economy stopped contracting during the period, emerging from recession after two quarters of declining gross domestic product. Will the positive numbers continue? Investors are still trying to assess how much trade tensions and a slump in manufacturing will weigh on the region, with the ECB becoming alarmed enough in Q1 to hold out the prospect of more stimulus.
Losing its status as the nation's leading rooftop solar company last year, Tesla (NASDAQ:TSLA) will announce plans today to begin selling solar panels and related equipment for up to 38% below the national average price, NYTreports. This will be achieved by standardizing systems and requiring customers to order them online. Homeowners will also photograph electric meters and send the images to the company, reducing the need for site visits.
Escalating his showdown with Democratic lawmakers, President Trump is suing to block Deutsche Bank (NYSE:DB) and Capital One (NYSE:COF) from complying with congressional subpoenas targeting his bank records. The legal maneuver follows reports from last week that the German bank had started the process of giving documents related to loans made to Trump and his businesses to the New York state attorney general, who is conducting her own probe. Deutsche Bank, which lent Trump some $340M, has been a primary target of the House Financial Services Committee, led by Representative Maxine Waters.
Vodafone (NASDAQ:VOD) has acknowledged to Bloomberg that it found hidden backdoors going back years with equipment supplied by Huawei for the carrier's Italian business. While the company said the issues were resolved, the revelation may further damage the reputation of Huawei as the U.S. seeks to ban the Chinese firm from building 5G telecom networks across the West. Bad news for Huawei has generally been seen by investors as an opportunity for Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC).
The world's largest smartphone and memory chip maker reported a 57% decline in first-quarter net income, which fell to 5.04T South Korean won ($4.4B) and missed analysts' recently reduced estimates. Despite the weakest profit in more than two years, Samsung Electronics (OTC:SSNLF) forecast improved second-half results. A postponed rollout of its Galaxy Fold - which was hoped to spark a mobile division turnaround - weighed on results, as well as decreased demand for memory chips.
BP (NYSE:BP) rose nearly 1% premarket after its underlying replacement cost profit, used as a proxy for net profit, came in at $2.4B, versus the $2.3B expected by analysts. Santander (NYSE:SAN) dipped 0.6% as net profit fell 10% to €1.84B amid restructuring costs in the U.K. and Poland, asset sales and disposals. Meanwhile, Airbus (OTCPK:EADSY) slipped 1% in Paris as the planemaker stuck to full-year financial targets after reporting a rise in Q1 core earnings that was overshadowed by charges related to a German ban on Saudi defense exports.
What else is happening...
Iran vows to keep exporting crude oil despite U.S. pressure.
The Fed is exploring another version of "quantitative easing."
'Boomers Are Facing A Financial Crisis' writes contributor Lance Roberts in a new SA article.
Alphabet (NASDAQ:GOOG) -7.3% AH on ad revenue slowdown.
MGM Resorts (NYSE:MGM) -3% AH following an EPS miss.
NXP Semiconductors (NASDAQ:NXPI) +1.1% AH amid upbeat forward guidance.
Restaurant Brands (NYSE:QSR) -1.4% after revenue came up short.
Transocean (NYSE:RIG) +0.2% AH posting improved sales, backlog.
Western Digital (NASDAQ:WDC) -4.5% AH on EPS miss, weak revenue mix.
In Asia, Japan closed. Hong Kong -0.7%. China +0.5%. India -0.1%.
In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude +1.3% to $64.35. Gold +0.4% to $1286.90. Bitcoin +1.1% to $5199.
Ten-year Treasury Yield flat at 2.53%
Today's Economic Calendar
FOMC meeting begins
8:30 Employment Cost Index
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:45 Chicago PMI
10:00 Consumer Confidence
10:00 Pending Home Sales
3:00 PM Farm Prices