Wednesday Morning Reads
- Worst Growth in Six Years
- Bull Traps
- Beijing Opens the Bank Vaults
- Too Early to Call Clear Recovery
- Inflation Stance Yellen Shunned
- Latest U.S. Slowdown Signal
- Most Chaotic Place on the Internet
- The Will to Survive
- Futures point to stocks rising as earnings season drives on
- PepsiCo beat estimates in Q1, reaffirms FY2019 outlook
- PepsiCo beats by $0.04, beats on revenue
- Realty Income declares $0.226 dividend
- Bank of New York Mellon misses by $0.02, misses on revenue
- A very rough session for REITs
- Aphria launches $300M convertible debt offering; shares down 4% premarket
- Crude-by-rail bill passes Washington House but with big change
- Qualcomm, Apple drop all litigation; QCOM +14.7%
- HollyFrontier cut to Sell, Cenovus upped to Neutral at Goldman Sachs
- Highlights from the Shanghai Auto Show
- IBM's mixed Q1 on slowing cloud growth
Futures point to stocks opening on the upside, as investors await another crop of first-quarter earnings including Pepsi (NASDAQ:PEP), Abbott Laboratories (NYSE:ABT), and Morgan Stanley (NYSE:MS). S&P and Nasdaq futures rise 0.2% each, while Dow futures edge up 0.1%. The Stoxx Europe 600 Index slips 0.2% with miners dropping along with iron ore prices. Hong Kong’s Hang Seng Index ended its session essentially flat, while Shanghai rose after China’s GDP increased 6.4% in the first three months of the year.
The U.S. and Turkey have failed to break their impasse over Turkey's plan to deploy a Russian air defense system the Pentagon says could jeopardize U.S. fighter aircraft including Lockheed Martin's (NYSE:LMT) F-35, which Turkish manufacturers helped build. Turkish officials repeated that the deal with Russia has been signed and is final, while the U.S. has threatened to impose sanctions under legislation that allows the punishment of entities doing business with Russia, and to expel Turkey from the F-35 program. The first batch of Russian S-400 missiles may be delivered as early as June, leaving little time for the dispute to be resolved.
Qualcomm (NASDAQ:QCOM) jumped 6.8% in after-hours trading after it and Apple (NASDAQ:AAPL) agreed to dismiss all litigation worldwide in a settlement that involves Apple paying QCOM. The companies also reached a six-year license agreement, effective April 1, with two one-year option periods plus a multiyear chipset supply agreement. In a regulatory filing Qualcomm says it expects incremental EPS of about $2 as product shipments ramp up.
China churned out a record 231M tons of steel in Q1 spurred by consumption in the infrastructure sector due to government stimulus. The Q1 figure is up almost 10% from a year earlier, with production in March rising 10% to 80.3M tons.
T-Mobile US (NASDAQ:TMUS) CEO John Legere says the Wall Street Journalreport that its merger deal with Sprint (NYSE:S) likely won’t be approved by the U.S. Department of Justice is "simply untrue." In a meeting earlier this month, Justice Department staff members laid out their concerns with the deal and questioned the companies' arguments that the merger would produce important efficiencies, according to the WSJ report. T-Mobile US fell 4.2% in after-hours trading, while Sprint sank 8%.
Netflix (NASDAQ:NFLX) Q1 EPS of 76 cents beat consensus by 19 cents and adjusted EBITDA of $538M topped estimates of $492M, but the streaming giant sees Q2 streaming adds of 5.0M, shy of the 5.4M consensus. Also, the company sees 2019 free cash flow deficit “modestly higher” at $3.5B on higher cash taxes due to its corporate structural change and additional investments in real estate and other infrastructure. Netflix still sees free cash flow improving in 2020 and each year afterwards.
IBM (NYSE:IBM) fell 2.5% in after-hours action after Q1 revenue of $18.2B missed the consensus estimate by $330M, as overall revenue fell 5% from a year ago and cloud and cognitive software revenue slipped 2%. Q1 EPS of $2.25 topped consensus by a penny. IBM reaffirmed 2019 EPS guidance of at least 5% Y/Y and free cash flow of about $12B.
What else is happening...
Can Central Banks Still Be Effective? Contributor Kristina Hooper talks about the Fed, data dependency, Brexit.
French firms rally to reconstruct Notre Dame cathedral.
As contributor Acting Man writes, long-term stock market sentiment as lopsided as ever.
IBM (IBM) -3.6% AH on mixed Q1 and slowing cloud growth.
Netflix (NFLX) -1.2% AH over Q2 subscriber outlook.
CSX (NASDAQ:CSX) +4.1% AH after huge efficiency gains.
United Continental (NASDAQ:UAL) +3.1% AH after profit beat, satisfying guidance.
Mellanox Technologies (NASDAQ:MLNX) flat AH on Q1 beat.
Interactive Brokers (IEX:IBKR) flat AH on Q1 earnings beat and electronic brokerage revenue declines.
In Asia, Japan +0.25%. Hong Kong -0.02%. China +0.29%. India closed.
In Europe, at midday, London +0.01%. Paris +0.20%. Frankfurt +0.21%.
Futures at 6:20, Dow +0.1%. S&P +0.20%. Nasdaq +0.27%. Crude +0.83%to $64.58. Gold +0.03% to $1,277.60. Bitcoin +2.52% to $5,235.30.
Ten-year Treasury Yield +1.3bps to 2.607%.Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 International Trade
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
12:30 PM Fed's Bullard: U.S. Monetary and Economic Policy
12:30 PM Fed's Harker: Economic Outlook
2:00 PM Fed's Beige Book