China tariff cut set to power Wall St to record highs - Reuters

(Reuters) - Wall Street’s main indexes were set to hit record highs at the open on Thursday as China’s plan to chop additional tariffs on some American goods by 50% helped ease fears over the financial fallout of the coronavirus epidemic.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., February 3, 2020. REUTERS/Lucas Jackson

Beijing said it would lower extra levies imposed last year against 1,717 U.S. products, weeks after the signing of a Phase 1 trade deal.

The tariff cut follows hefty monetary stimulus by China’s central bank earlier this week to support an economy hit by shutdowns and travel restrictions due to the virus outbreak.

“The fear investors had when the virus first started seems to have abated somewhat,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

A string of positive U.S. economic data too have helped mitigate worries, fueling a three-day rally on Wall Street. The Nasdaq .IXIC hit a record high on Wednesday and the S&P 500 .SPX is on pace for its best week in eight months after last week's steep pullback.

However, the impact of the health emergency in China continued to show up in corporate reports. Chipmaker Qualcomm Inc (QCOM.O) flagged a potential threat to the mobile phone industry from the outbreak, with a possible impact on manufacturing and sales.

Its shares fell 1.8% in premarket trading.

At 8:26 a.m. ET, Dow e-minis 1YMcv1 were up 109 points, or 0.37%. S&P 500 e-minis EScv1 were up 10.5 points, or 0.31% and Nasdaq 100 e-minis NQcv1 were up 33.5 points, or 0.36%.

The fourth-quarter earnings season is more than half done with nearly 70% of S&P 500 companies exceeding their earnings estimates, according to IBES data form Refinitiv.

Twitter Inc (TWTR.N) gained about 8.3% after the micro-blogging platform touched $1 billion in quarterly revenue for the first time ever, beating analysts’ estimates.

Breakfast cereal maker Kellogg Co (K.N) tumbled 6.3% after it reported a decline in fourth-quarter sales.

Tesla Inc (TSLA.O) slipped 3.4%, falling for the second day after a stunning six-day rally.

As the week draws to a close, investor attention will shift to the crucial U.S. jobs report on Friday.

Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty

Our Standards:The Thomson Reuters Trust Principles.

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2020-02-06 13:07:00Z
CAIiEIrKgsnE-9Pi0wMouRaJEzcqFggEKg0IACoGCAowt6AMMLAmMKT5lwM

5 things to know before the stock market opens Thursday - CNBC

1. Dow set to continue this week's rally

Traders work on the floor of the New York Stock Exchange (NYSE) on January 21, 2020 in New York City.

Spencer Platt | Getty Images

U.S. stock futures were moving higher again Thursday morning. Wall Street's powerful rally Wednesday pushed the S&P 500 to an all-time high close. The index joined the Nasdaq in record territory. The Dow Jones Industrial Average soared more than 480 points Wednesday after a 400-plus-point advance Tuesday and a more than 140-point gain Monday. The indicated gains at Thursday's open could send the Dow back to record highs, making Friday's over 600-point coronavirus-driven sell-off seem like a distant memory. Investors got weekly jobless claims data before-the-bell. New filings for unemployment benefits dropped to a nine-month low last week. This comes after Wednesday's strong ADP private-sector jobs numbers for January and ahead of the government's latest monthly employment report on Friday. Mattress maker Casper is set to begin trading Thursday after pricing its initial public offering at $12 per share, the low end of its expected range.

2. Twitter shares jump on strong Q4 daily active user growth

Twitter CEO and co-founder Jack Dorsey gestures while interacting with students at the Indian Institute of Technology (IIT) in New Delhi on November 12, 2018.

Prakash Singh | AFP | Getty Images

Shares of Twitter were jumping more than 8% in the premarket after the social network reported better-than-expected fourth-quarter revenue and daily active users. Twitter missed estimates on Q4 earnings and warned on outlook. However, the stock move higher seemed to be all about the 21% active-user growth to 152 million in the fourth quarter. Twitter CEO Jack Dorsey said in the earnings press release, "We reached a new milestone in Q4 with quarterly revenue in excess of $1 billion." Last quarter, Twitter reported "a number of headwinds" that contributed to a revenue shortfall, sending the stock down more than 20% at the time.

3. Tesla under pressure again after this week's spike

SpaceX owner and Tesla CEO Elon Musk gestures during a conversation at the E3 gaming convention in Los Angeles, June 13, 2019.

Mike Blake | Reuters

Shares of skyrocketing Tesla were under pressure in Thursday's premarket trading. The stock plunged 17% on Wednesday to $734.70 after surging nearly 20% on Monday and almost 14% on Tuesday. Tesla temporarily closed its stores in mainland China as of last Sunday, according to an online post from a company sales employee. That comes after a company executive said cars initially scheduled for delivery in early February will be delayed due to the coronavirus outbreak. Tesla shares have gone parabolic in 2020, gaining 75% since Jan. 1 and about 220% in the past six months.

4. Confirmed coronavirus cases rise to 28,000 in China, with over 560 deaths

A Chinese man wears a protective mask as he walks during a snowfall in an empty commercial street on February 5, 2020 in Beijing, China.

Kevin Frayer | Getty Images

Chinese health officials overnight increased their total of confirmed coronavirus cases to 28,018 in China. The death toll rose to 563 there. The Philippines and Hong Kong each have reported one fatality. Japan's health ministry said 10 more people on board the quarantined Diamond Princess cruise ship have tested positive for the virus, bringing the total number of confirmed cases to 20 out of the 3,700 passengers and crew. Confirmed coronavirus cases in the United States held steady at 11 as of Wednesday. The World Health Organization said there's been more than 150 coronavirus cases in about two dozen countries outside of China.

5. China will cut in half tariff rates on $75 billion of US goods

A US cargo ship is seen at the Yangshan Deep-Water Port, an automated cargo wharf, in Shanghai on April 9, 2018.

Johannes Eisele | AFP | Getty Images

China announced Thursday that it will cut in half tariff rates on hundreds of U.S. goods worth about $75 billion. Retaliatory tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, according to China's Ministry of Finance. The reductions will take effect on Feb. 14, the same day the U.S. said it would cut in half tariff rates from 15% to 7.5% on $120 billion of Chinese goods. China said any further tariff adjustments will depend on how Chinese and U.S. trade relations evolve. The two sides reached a phase-one trade deal in December and President Donald Trump signed it in January. The U.S. and China are now looking to find new areas of agreement to further deescalate their trade war.

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2020-02-06 13:05:00Z
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Twitter reports $1.01B in Q4 revenues with 152M monetizable daily active users - TechCrunch

TechCrunch ist jetzt Teil der Verizon Media-Familie. Wir (Verizon Media) und unsere Partner benötigen Ihre Einwilligung, um auf Ihr Gerät zuzugreifen, Cookies zu setzen und Ihre Daten einschließlich Ihres Standorts zu nutzen, um mehr über Ihre Interessen zu erfahren, relevante Werbung bereitzustellen und deren Effektivität zu messen. Verizon Media stellt Ihnen zudem relevante Anzeigen auf den Produkten unserer Partner zur Verfügung. Lernen Sie hier mehr darüber

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2020-02-06 12:30:17Z
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U.S. Futures Climb With Stocks on China Tariff Cut: Markets Wrap - Yahoo Finance

U.S. Futures Climb With Stocks on China Tariff Cut: Markets Wrap

(Bloomberg) -- U.S. equity futures rose with stocks on Thursday as China’s plans for tariff cuts on American imports added to optimism the global economy will weather the hit from the coronavirus. Treasuries fluctuated.

Contracts on the main American equity benchmarks all pointed to a fourth day of gains after China said it will lower levies on $75 billion of U.S. goods next week, likely satisfying part of the interim trade deal. Twitter Inc. rose about 3% in pre-market trading after topping analysts’ projections for fourth-quarter revenue.

Strong results also helped power the Stoxx Europe 600 Index to a record high. ArcelorMittal SA jumped the most since 2016 after expressing optimism on the outlook for steel demand this year, and Societe Generale SA rose after pledging to boost shareholder returns. Asian benchmarks advanced, with Japan’s rising more than 2% as Toyota Motor Corp. reported a higher-than-expected quarterly profit.

The latest trade developments have further boosted investor optimism after several reports on possible vaccines for the virus on Wednesday, though the World Health Organization later said there are no proven therapeutics. While some warn of complacency as a gauge of global stocks inches toward a record, others flag support from policy makers, and recent indicators showing the trajectory of growth was solid before the virus struck.

“Companies are going to continue to struggle in the short term” with disruptions and forgone business due to the virus, said Joe Zidle, chief investment strategist at Blackstone Group Inc. But China’s moves in recent days to reopen markets and inject stimulus “gave global investors a degree of confidence that the Chinese policy makers had at least taken the worst-case scenario off the table,” he said.

Elsewhere, a gauge of European credit risk hit its lowest since 2007, while the euro held steady even as data showed German factory orders fell at their fastest pace in more than a decade.

Here are some key events coming up:

German industrial production is due on Friday.The U.S. employment report for January is set for Friday release.Australia’s central bank chief speaks and takes questions at a parliamentary committee.

And these are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 0.4% as of 7:21 a.m. New York time.The Stoxx Europe 600 Index climbed 0.4%.The MSCI Asia Pacific Index gained 1.8%.The MSCI Emerging Market Index gained 1.4%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1002.The British pound sank 0.3% to $1.2964.The onshore yuan rose 0.1% to 6.969 per dollar.The Japanese yen declined 0.1% to 109.90 per dollar.

Bonds

The yield on 10-year Treasuries dipped less than one basis point to 1.65%.The yield on two-year Treasuries declined less than one basis point to 1.44%.Germany’s 10-year yield climbed less than one basis point to -0.36%.Britain’s 10-year yield fell one basis point to 0.604%.Japan’s 10-year yield gained two basis points to -0.017%.

Commodities

West Texas Intermediate crude gained 1.1% to $51.31 a barrel.Brent crude climbed 0.5% to $55.56 a barrel.Gold increased 0.5% to $1,564.47 an ounce.

--With assistance from Christopher Anstey, Joanna Ossinger and Adam Haigh.

To contact the reporter on this story: Yakob Peterseil in London at ypeterseil@bloomberg.net

To contact the editor responsible for this story: Sam Potter at spotter33@bloomberg.net

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.

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2020-02-06 11:33:00Z
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Yum Brands' stock tumbles as weak sales at Pizza Hut lead to earnings miss - CNBC

Ye Aung Thu | AFP | Getty Images

Yum Brands on Thursday reported quarterly earnings that fell short of analysts' expectations as Pizza Hut's struggles continue.

Shares of the company slid more than 2% in premarket trading.

Here's what the company reported, compared with what Wall Street was expecting based on a survey of analysts by Refinitiv:

• Earnings per share: $1, adjusted, vs. $1.13 expected
• Revenue: $1.69 billion, vs. $1.66 billion expected
• Same-store sales: 2%, vs. 2.3% expected

Taco Bell's parent company reported fiscal fourth-quarter net income of $488 million, or $1.58 per share, up from $334 million, or $1.04 per share, a year earlier.

The company's minority stake in Grubhub trimmed earnings per share by 5 cents. Grubhub struggled in 2019 as fierce competition with DoorDash, Uber Eats and Postmates put pressure on its business.

Excluding refranchising gains and other items, Yum earned $1 per share, missing the $1.13 per share expected by analysts surveyed by Refinitiv.

Net sales rose 9% to $1.69 billion, topping expectations of $1.66 billion. The company reported same-store sales growth across KFC, Pizza Hut and Taco Bell of 2%. Yum announced in January that it would be adding a fourth brand to its portfolio: Habit Restaurants, which owns the Habit Burger Grill.

Pizza Hut was once again the laggard during the quarter. Same-store sales at the pizza chain fell 2%, a steeper drop than expected by analysts.

KFC's same-store sales increased by 3%, and Taco Bell's grew by 4% in the fourth quarter.

On Wednesday, Yum China, which was spun off in 2016, warned that the Wuhan coronavirus will likely "materially affect" its 2020 sales and profits. The Chinese licensee of KFC and Pizza Hut said it could report an operating loss in the first quarter. China is KFC's largest market by systemwide sales.

Yum China has temporarily closed about a third of its restaurants in the country, and those still open have seen sales drop dramatically. Same-store sales during the Lunar New Year holiday fell by 40% to 50% from a year ago. In response, Yum China has rolled out "contactless delivery" so customers do not have to engage with employees to pick up their food from a restaurant.

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2020-02-06 12:18:00Z
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China halves tariffs on $75 billion worth of US goods, as coronavirus outbreak escalates - CNN International

The move comes as China is grappling with the escalating coronavirus outbreak. The disease has killed 565 people, mostly in China, and infected more than 28,000 people in over 25 countries and territories.

The reduction affects US goods that China imposed tariffs on last September. Starting next week, China will cut the additional 10% tariff rate it enacted back then on some goods to 5%. Other goods that were taxed an extra 5% will now be levied 2.5%, according to a statement from China's State Council Tariff Commission.

The commission added that other tariffs on US goods will be maintained while it continues to work on exemptions.

"China hopes that both sides will abide by bilateral agreements and make an effort to implement relevant provisions so that we can boost market confidence, promote bilateral trade relations and global economic growth," the statement said.

These tariff rollbacks had been widely expected and were a gesture in response to the United States cutting its September round of tariffs by half in the "phase one" trade deal, according Tommy Wu, an economist with Oxford Economics.

"Nevertheless, the announcement may help boost market sentiment, especially at a time when China is battling with the economic impact of the coronavirus outbreak," he said.

Wu and other experts have warned that the coronavirus outbreak could dent China's economic growth this year and have knock-on effects for the global economy.

When the outbreak hit, Beijing took the extraordinary step of placing major cities on lockdown in order to contain it. The government also extended the Lunar New Year holiday, effectively bringing factories around the country to a standstill as workers have been ordered to stay home. Millions of people have pulled back on consumption, as they hunker down indoors and avoid public spaces.

Washington officials earlier this week said the outbreak could delay exports of US goods to China. Last month, Beijing had agreed to buy an additional $200 billion worth of products from the United States as part of a "phase one" trade deal.

"It is true the 'phase one' trade deal, the export boom from that trade deal, will take longer because of the Chinese virus," Larry Kudlow, US President Donald Trump's chief economic adviser, said in an interview with Fox Business on Tuesday.

Agricultural goods such as soybeans, pork, cotton and wheat had accounted for a big chunk of the new purchases.

On Wednesday, US Secretary of Agriculture Sonny Perdue said the United States should be patient with China's ability to meet those trade pledges, given the coronavirus outbreak.

"If they're really trying and it really just blows the economy out of the water, then we would have to be understanding of that," Perdue said, according to Reuters.

Oxford Economics earlier this week cut its GDP forecast for China, saying that even with a rebound in the second quarter of this year, "we now forecast 5.4% growth for 2020, compared with 6% previously."

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2020-02-06 10:17:00Z
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China halves tariffs on $75 billion worth of US goods, as coronavirus outbreak escalates - CNN

The move comes as China is grappling with the escalating coronavirus outbreak. The disease has killed 565 people, mostly in China, and infected more than 28,000 people in over 25 countries and territories.

The reduction affects US goods that China imposed tariffs on last September. Starting next week, China will cut the additional 10% tariff rate it enacted back then on some goods to 5%. Other goods that were taxed an extra 5% will now be levied 2.5%, according to a statement from China's State Council Tariff Commission.

The commission added that other tariffs on US goods will be maintained while it continues to work on exemptions.

"China hopes that both sides will abide by bilateral agreements and make an effort to implement relevant provisions so that we can boost market confidence, promote bilateral trade relations and global economic growth," the statement said.

These tariff rollbacks had been widely expected and were a gesture in response to the United States cutting its September round of tariffs by half in the "phase one" trade deal, according Tommy Wu, an economist with Oxford Economics.

"Nevertheless, the announcement may help boost market sentiment, especially at a time when China is battling with the economic impact of the coronavirus outbreak," he said.

Wu and other experts have warned that the coronavirus outbreak could dent China's economic growth this year and have knock-on effects for the global economy.

When the outbreak hit, Beijing took the extraordinary step of placing major cities on lockdown in order to contain it. The government also extended the Lunar New Year holiday, effectively bringing factories around the country to a standstill as workers have been ordered to stay home. Millions of people have pulled back on consumption, as they hunker down indoors and avoid public spaces.

Washington officials earlier this week said the outbreak could delay exports of US goods to China. Last month, Beijing had agreed to buy an additional $200 billion worth of products from the United States as part of a "phase one" trade deal.

"It is true the 'phase one' trade deal, the export boom from that trade deal, will take longer because of the Chinese virus," Larry Kudlow, US President Donald Trump's chief economic adviser, said in an interview with Fox Business on Tuesday.

Agricultural goods such as soybeans, pork, cotton and wheat had accounted for a big chunk of the new purchases.

On Wednesday, US Secretary of Agriculture Sonny Perdue said the United States should be patient with China's ability to meet those trade pledges, given the coronavirus outbreak.

"If they're really trying and it really just blows the economy out of the water, then we would have to be understanding of that," Perdue said, according to Reuters.

Oxford Economics earlier this week cut its GDP forecast for China, saying that even with a rebound in the second quarter of this year, "we now forecast 5.4% growth for 2020, compared with 6% previously."

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2020-02-06 09:03:00Z
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