|Day's Range||2,905.44 - 2,919.82|
|52 Week Range||2,346.58 - 2,954.13|
The Fed could drop the word "patient" in its policy meeting concluding June 19, setting the scene for future rate cuts amid uncertainty over trade and weaker economic data.
Jefferies Chief Market Strategist David Zervos discusses the Fed's likely plan of action on Wednesday following the 2-day policy meeting.
Wall Street is increasingly pricing in an interest rate cut as Central Bankers start to gather for the next meeting that starts tomorrow. Yahoo Finance's Alexis Christoforous and Brian Sozzi speak to Editor-in-Chief Andy Serwer and Brian Cheung.
Investors might have gotten a preview of the Fed from the European Central Bank’s Mario Draghi, who hinted that the ECB is ready to stimulate the European economy if it doesn’t improve.
A much-anticipated meeting of the Federal Reserve’s policy-setting panel kicks off Tuesday. The FOMC is unlikely to cut interest rates right now, but could lay the groundwork for future reductions.
President Donald Trump’s hostile response on Twitter to Draghi’s signal that the ECB could move to provide further monetary stimulus as early as next month is stoking fears that a potential U.S. trade war with its major trading partners could also be accompanied by a currency war.
Shares of Bank of America Corp. gained 0.4% in premarket trading Tuesday, after a bullish call from BMO Capital analyst James Fotheringham, who said Street expectations and valuations "look too low." Fotheringham raised his rating to outperform, after being at market perform for at least the past three years, while keeping his price target at $37, which is 33% above Monday's stock closing price of $27.93. Fotheringham said about one-third of the potential upside to his price target is based on expected upward revisions of consensus earnings expectations, on the back of higher fees and share repurchases and lower tax rates. The remaining two-thirds of the potential gain is from an expected "rerating" of price-to-earnings valuations, given that the stock is currently trading at a 15% discount to average valuations that have historically been seen during benign economic conditions. He said even if the Federal Reserve lowers interest rates, an increase in consensus earnings expectations should more than offset any dilution to net interest margin. The FactSet 2019 EPS consensus of $2.85 is down from $2.90 at the end of March, but is up from $2.61 a year ago. The stock has lost 6.3% over the past three months, while the SPDR Financial Select Sector ETF has edged up 0.3% and the Dow Jones Industrial Average has gained 2.0%.
Kellogg Co. announced a reorganization plan on Tuesday that will mostly affect its North American operations. The move comes ahead of the sale of the company's selected cookies, fruit and fruit-flavored snacks, pie crusts and ice cream cones businesses to Ferrero International SA, which is expected to close the end of July. "The reorganization plan is designed to simplify the organization that supports the remaining North America business after the divestiture and related transition," the company said in a regulatory filing. "The overall project is expected to be substantially completed by December 31, 2020." Kellogg is expecting to book pretax charges of about $35 million, including about $20 million to cover the costs of severance and other benefits. Shares were up about 0.5% premarket, but have fallen 0.8% in 2019 through Monday, while the S&P 500 has gained 15%.
Oracle Corp. shares are off 0.65 in premarket trading Tuesday after Macquarie analyst Sarah Hindlian downgraded the stock to neutral from outperform ahead of the company's Wednesday afternoon earnings report. "Our checks for the FQ4 suggest that Oracle was able to close the quarter and the year in the final weeks, with some pockets of success like Cloud ERP, but it was a struggle," she wrote. "Along with several leading partners seeing softening of the pipeline, we believe there is a step function lower in demand for Oracle and it is appropriate to re-evaluate." She argued that stock buybacks were driving Oracle's recent outperformance. Shares are up 18% so far this year, as the S&P 500 has gained 15%.
Long-term bets on technology, and partnerships with Microsoft, Samsung, Amazon, and others have helped Advanced Micro Devices prosper. We spoke to AMD CEO Lisa Su, one of our 2019 World’s Best CEOs.
The Fed's statement at 2 p.m. EDT (1800 GMT) on Wednesday will likely provide insights into the impact of the U.S.-China trade war, President Donald Trump's calls for a rate cut and weaker economic data on monetary policy. Sentiment was buoyed by ECB President Mario Draghi's comments indicating a possibility of new rate cuts or asset purchases.
Ebix Inc. said Tuesday that it had approved the appointment of up to five investment bankers as it aims for an initial public offering of its EbixCash business in the second quarter of 2020. Ebix makes software for e-commerce businesses, while EbixCash offers tools that help with international money remittance, foreign exchange, and gift cards. Ebix announced that it expects to conduct the EbixCash IPO on Indian stock exchanges and that the company is in the "advanced stages" of picking bankers for the deal. Ebix shares dropped 13% in Monday's session but are inactive in premarket trading Tuesday. The stock has risen 10% so far this year, as the S&P 500 has risen 15%.
U.S. stocks on Tuesday are set to extend the previous session’s gains ahead of the start of the Federal Reserve’s two-day policy meeting.
Shares of Pinterest Inc. are up 2.3% in premarket trading Tuesday after Wedbush analyst Ygal Arounian initiated coverage of the stock with an outperform rating and $33 target. "Pinterest is unique to any other media platform in its visual search and discovery toolset and that advertising actually improves the consumer experience," he wrote. "We view Pinterest as well positioned to capture greater wallet share due to the commerce intent-rich nature of the platform." Arounian said that Pinterest is early in its efforts to monetize the platform and has opportunities to grow the base of international markets that it makes money from. "Many key initiatives like its self-serve ad platform, international localization, shopping, and its catalogues product aren't expected to have meaningful impact until 2020," he wrote of the company's broader efforts. Pinterest shares have gained 4.3% over the past month, as the S&P 500 has risen 1.1%.
What I saw was the euro fall off of cliff, the U.S. Dollar Index (DXY) spike, and Dow futures run from well below fair value to well above in response to European equity markets doing the same. In response, at least in the middle of what some of you call night, 10-year German bunds were yielding a negative 0.295%, while U.S.10-year notes were giving up 2.05%, suggesting that if the ECB is preparing to once again crank up their purchasing of sovereign, agency, and corporate debt (quantitative easing), that the Fed might need to be more dovish. Keep in mind that in addition to the Federal Open Market Committee (FOMC) policy meeting that kicks off here on Tuesday and culminates on Wednesday, that the markets will hear from the Bank of Japan on Wednesday and the Bank of England on Thursday.
Shares of Digital Ally Inc. plummeted 45% toward a record low in premarket trading Tuesday, after the maker of video surveillance products for law enforcement and homeland security received an unfavorable ruling in its years-long patent dispute with Axon Enterprise Inc. Axon shares gained 1.5% ahead of the open. Axon said the U.S. District Court for Kansas found that Axon's signal technology did not infringe on Digital Ally's patent, and dismissed the case in its entirety. Digital Ally said it intends to appeal the court's ruling, saying the court had accepted Axon's "incorrect and mistaken interpretation" of Digital Ally's patent claims. "Axon misled this Court and convinced the judge to take an overly narrow view of our patent," said Digital Ally Chief Executive Stanton Ross. "We highly doubt the Court of Appeals for the Federal Circuit will be similarly misled." Digital Ally's stock was on track to open below its record close of $1.75 on Nov. 2 and Nov. 3 of 2017. It has tumbled 23.5% over the past three months through Monday, while Axon shares have shot up 36.3% and the S&P 500 has gained 2.0%.
(Bloomberg) -- Stocks rallied globally with bonds as comments from ECB officials added fuel to investor expectations for easier monetary policies from the world’s biggest central banks.The S&P 500, Nasdaq 100 and Dow Jones indexes advanced along with the Stoxx Europe 600, while most Asian gauges rose earlier. The euro turned weaker after European Central Bank President Mario Draghi said additional stimulus may be needed if the economic outlook doesn’t improve. That move pared briefly when President Donald Trump weighed in, accusing the ECB in a tweet of weakening its currency to make the region’s exports more competitive. Three of the central bank’s officials told Bloomberg an interest-rate cut would probably be the first step in any stimulus.At the same time, data showed investor confidence in Germany’s economic outlook worsened dramatically in June, adding to expectations of ECB support. European sovereign bonds leaped, led by Italian and Greek notes, while Treasuries also climbed. France’s 10-year yield fell to 0% for the first time, with the country set to join the list of European nations with benchmark debt that have negative rates. Oil fluctuated, with OPEC nations still unable to agree on a date for their next meeting, adding to uncertainty over whether production cuts would be extended.With central banks around the world moving toward looser policy as trade tensions weigh on the global economy, investors are looking for signals from the Federal Reserve tomorrow on the likelihood of interest-rates cuts. That’s the headline act in a week that includes the ECB gathering in Portugal, as well as Bank of England and Bank of Japan policy announcements.Central banks in Australia, Russia, India and Chile have recently loosened policy. The Reserve Bank of Australia said Tuesday that further easing is more likely than not.Elsewhere, Bitcoin steadied after a four-day 17% surge.Here are some key events coming up:The Federal Reserve, Bank of Japan and Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.The Fed meeting begins Tuesday with a decision and press conference the next day. Officials are expected to debate a rate cut to shelter the U.S. economy, in part, from the fallout caused by escalating trade disputes.In the U.K. Tuesday there will be a second ballot on the leadership contest to choose Theresa May’s successor as leader of the country’s ruling party.Final May CPI data for Britain are due on Wednesday. U.K. retail sales are set for release on Thursday. These are the main moves in markets:StocksThe S&P 500 Index rose 0.6% as of 9:33 p.m. New York time, while the Nasdaq Composite Index gained 0.9% and the Dow Jones Industrial Average increased 0.6%.The Stoxx Europe 600 jumped 1.3%. The MSCI Emerging Market Index rose 0.7%.The MSCI Asia Pacific Index gained 0.4%, the first increase in five trading sessions. CurrenciesThe Bloomberg Dollar Spot Index rose less than 0.1%.The euro eased 0.2% to $1.1199, while the yen strengthened 0.3% to 108.22 per dollar.The British pound weakened less than 0.1% to $1.2524.The MSCI Emerging Markets Currency Index rose 0.2%, the first increase in five trading sessions.BondsThe yield on 10-year Treasuries dropped 6 basis points to 2.03%.Germany’s 10-year yield fell 8 basis points to negative 0.32%. CommoditiesWest Texas Intermediate fell 0.9% to $52.41 a barrel.Gold rose about 1% to $1,352 an ounce.The Bloomberg Commodity Index was little changed.\--With assistance from Cormac Mullen.To contact the reporter on this story: Todd White in Madrid at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Robert Brand, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
In lieu of a big stock-market selloff on global economic growth slowdown and trade jitters, the market seems to still be expecting the “Art of the Deal” from Donald Trump on China and/or the Federal Reserve cutting interest rates 0.75 percentage points this year — which ever comes first. During that time, however, trade wars and tariff threats have escalated, tankers have been torpedoed, and safe-haven plays of Treasurys (BX:TMUBMUSD10Y) gold (GC00) and the U.S. dollar (DXY) have been strongly bid. Big picture: Market participants want to believe this is 1995 — when the Fed cut rates the same day in July as the stock market set a record.
Stocks and government bonds rallied after Mario Draghi offered markets the clearest indication yet that the European Central Bank is ready to launch another round of stimulus if needed. The 10-year Bund yield fell as much as 7 basis points to minus 0.318 per cent, to leave investors buying the debt and holding to maturity facing an even greater guaranteed loss. Italian 10-year government bond yields fell 16 basis points to take them to their lowest level since a politically driven sell-off in May last year, while the US 10-year Treasury yield fell 7 basis points on the day to hit its lowest level since September 2017.