Summary:
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Trump said he will sign national emergency bill to fund Wall on the border with Mexico
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S&P 500 (US500 on xStation5) climbs back above the 200-session moving average
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Moody’s Corp (MCO.US) and PepsiCo (PEP.US) reported earnings today
While recovery on the global stock markets was put under question yesterday, downbeat moods are just a memory for now. Stocks in Europe and the United States are surging on Friday afternoon on the back of positive remarks spurring from Beijing. Dow Jones (US30) is the strongest out of three major US indices while Nasdaq (US100) is lagging its peers. Financials outperform while utilities push just slightly higher.
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US500 (S&P 500 futures underlying) surges today just like other indices from the US or Europe. In turn, the benchmark climbed back above the 200-session moving average. Note that in case current optimism extends into new week we may see a test of the resistance zone ranging 2810-2825 pts. Source: xStation5
Markets were eagerly awaiting Donald Trump briefing scheduled for Friday morning (Eastern Time). Traders hoped to hear some fresh comments on trade as well as what will the US President do amid lack of funding for the Wall in the Congressional border security bill. Starting with trade, we were not offered any blockbusters. Trump repeated that talks are going well, that the deal is closer and that he looks forward to meet the Chinese President, Xi Jinping, soon. Additionally, Donald Trump added that the United States are going to significantly boost trade with the United Kingdom and that tariffs on steel are working.
It was widely expected that markets will be offered such mild message on this topic therefore attention was drawn to the border security. Donald Trump confirmed that he will sign national emergency bill that would allow him to get the funding he needs to build Wall on the border with Mexico. This is the aftermath of the Congressional border security bill proposed by Republicans and Democrats that included just a small pool of money for Wall. The US president would also like to see a major immigration reform. Mick Mulvaney, acting White House Chief of Staff, offered some more remarks into presidential plans on border security. Trump will get around $8 billion to fund wall for which he aims to build 234 miles of border fence.
S&P 500 top movers and laggard after the two hours of trade. Source: Bloomberg
Company News
As Coca-Cola reported its earnings yesterday, the time has come for its biggest rival - PepsiCo (PEP.US) - to do the same. Pepsi revenue and EPS came in line with expectations at $19.524 billion and $1.49, respectively. However, just like its major competitor, PepsiCo said that it expects foreign exchange rates to adversely impact earnings in 2019. Moreover, the company is planning to increase advertising and marketing investments what will additionally hurt company’s bottom line.
Moody’s Corp (MCO.US) can be found among S&P 500 leaders today. Parent company of Moody’s Investors Services, major rating agency, reported earnings for the fourth quarter of 2018. Moody’s reported revenue of $1.06 billion against expected $1.13 billion and an EPS of $1.63, lower than forecasted $1.69. While those results are far from good, the company is benefiting from upbeat guidance for 2019. Moody’s Corp expected 2019 EPS to come in the range of $7.85-8.10 while median estimate pointed to earnings of $7.92.
Newell Brands (NWL.US), the US marketer of consumer and commercial products, also publish earnings report for the final quarter of the previous year today. The company provided better-than-expected EPS of $0.71 (median estimate: $0.666). However, sales disappointed as they came in at $2.341 billion against expected $2.430 billion. While results are a bit mixed, guidance released along with them makes situation more clear. Newell Brands sees full-year EPS in 2019 in the range of $1.50-1.65 against median estimate of $1.99. According to company’s executives, revenue in the first quarter of 2019 should come in the range of $1.66-1.70 billion, much lower than market consensus of $1.8 billion. Having said that, one should not be surprised that Newell is trading among the biggest S&P 500 laggards today.
PepsiCo (PEP.US) has gained over 10% since plunge on the Christmas Eve. The stock is trading above 50- and 200-session moving average and recently broke above the $115 handle. Note that the closest level to watch for buyers could be the resistance zone ranging $114.50-115.50. Source: xStation5
