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Futures point to slightly lower opening on Wall Street
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Morgan Stanley (MS.US) to buy E*Trade Financial (ETFC.US)
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Domino’s Pizza (DPZ.US) with strong Q4 2019 earnings
US stock index futures point to a small decline at the open of today’s session on Wall Street. Investors remain worried about an increase in the number of coronavirus cases reported outside China. Morgan Stanley announced the biggest post-crisis acquisition for a major Wall Street bank.
The ongoing US stock market rally is being fuelled by tech stocks with Nasdaq (US100) and FANG+ (USFANG) reaching new all-time highs almost everyday. However, one group of tech stocks lagged - gaming companies. Industry’s index USGAME is yet to break above the mid-January all-time high near $1400. The index approached the area yesterday and will try to make a break today. Source: xStation5
Morgan Stanley (MS.US) is set to buy E*Trade Financial (ETFC.US) for $58.74 per share. Total deal value will amount to $13 billion. In case the acquisition goes through, it will be the biggest deal by a major US bank since the global financial crisis. The transaction is expected to be an all-stock one. E*Trade is a discount broker that focuses on smaller traders. Acquisition will bolster Morgan Stanley’s presence in this sector. E*Trade began to struggle after its two biggest rivals - Charles Schwab and TD Ameritrade - announced merger last year. Outlook became even more blurry after Charles Schwab slashed trading fees to zero and effectively forced competitors to do the same.
E*Trade Financial (ETFC.US) has been trading in a downward move since mid-2018. The stock plummeted to $35 at the beginning of October 2019 after Charles Schwab announced cutting trading fees to 0. However, following news of Morgan Stanley's takeover, the stock is expected to launch today’s trading near the offer price of $58.74 (+30.6%). Source: xStation5
Tesla (TSLA.US) gained 6.88% yesterday. However, neck-breaking rally on Tesla shares may continue following reports from China. According to Bloomberg, China is considering prolonging EV subsidies beyond 2020. The decision comes after China’s EV sales showed the first annual decline in 2019.
Domino’s Pizza (DPZ.US) enjoys strong gains in pre-market trade. The company reported earnings report for Q4 2019. Adjusted EPS of $3.13 was 5% higher than expected while revenue of $1.15 billion beat estimates by 2.7%. Retail sales growth stood at 6.9% YoY. Comparable sales in US company owned stores grew 3.9% YoY (exp. 1.8%) while comparable sales in US franchise stores increased 3.3% YoY (exp. 2.2%). The company trades over 10% higher in pre-market.
Domino’s Pizza (DPZ.US) has been trading sideways since mid-2018. However, the stock managed to break above key resistance zone at $295 earlier this week and tested $300 handle yesterday. The stock is expected to launch today’s at new ATH near $325 handle - over 10% higher than yesterday’s close. Source: xStation5
