The Dow Jones Industrial Average looks set for another day of gains. In today's Morning Movers, we...
•...explain why earnings season will be less about profits and more about what companies say about trade; •...review PepsiCo's (PEP) results; •...and highlight a downgrade for Chipotle Mexican Grill (CMG).
Stocks look set to gain for a fourth consecutive day as investors look past tariffs and see nothing much to be worried about.
S&P 500 futures have ticked up 0.1%, while Dow Jones Industrial Average futures have risen 63 points, or 0.3%. Nasdaq Composite futures have advanced 0.1%.
It's not just that the market is rallying--it's the way it's rallying. Evercore ISI's Dennis DeBusschere notes that after being led higher by defensive sectors like utilities last week, the S&P 500 got a lift from financials yesterday. "Over the past few months Defensives have outperformed as trade worries increased," he explains. "Currently though, trade concerns have started to decline...The short term oversold condition in Financials, which reached extreme levels late last week, will continue to be worked off and support the group near term."
But don't forget, earnings season is getting underway, with PepsiCo (PEP) releasing their results today, before bank stocks really get things going with their Friday releases. And investors will be watching closely to see what they glean about the state of the trade war from company comments. "That will leave markets sensitive to earnings discussions and any developments on the trade front, especially as the S&P is approaching key resistance in the upper 2700's where the last rally failed, and stocks pulled back," says The Sevens' Reports Tom Essaye.
Earnings & News
Celgene (CELG) is up 1.6% to $85.16 after announcing that Luspatercept, its anemia drug being developed with Acceleron Pharma, performed well in a Phase III study.
PepsiCo (PEP) is up 3% to $111.02 after reporting second-quarter earnings. The snack and beverage maker earned $1.61 a share on revenue of $16.09 billion. Analysts were looking for earnings of $1.53 a share on revenue of $16.05 billion. For the full year, it expects to earn $5.70 a share, above the $5.65 consensus.
Tesla (TSLA) is up 2.8% to $328 on reports that it could be planning a China factory with a 500,000 per-year production capacity. - Teresa Rivas
Upgrades & Downgrades
Biogen (BIIB) is down 1.1% to $350 after Robert W. Baird downgraded it to Neutral.
Cerner (CERN) is down 2.1% to $62.40 after Evercore ISI downgraded it to Underperform.
Chipotle Mexican Grill (CMG) is down 1.9% to $455 after Mizuho downgraded it to Underperform.
eBay (EBAY) is down 1.4% to $37.38 after SunTrust Robinson Humphrey downgraded it to Hold.
KB Home (KBH) is up 3.3% to $28.39 after Susquehanna upgraded it to Positive.
Nordstrom (JWN) is down 1.1% to $52.93 after KeyBanc Capital Markets downgraded it to Sector Weight.
Stitch Fix (SFIX) is up 4% to $32.36 after KeyBanc Capital Markets initiated coverage with an Overweight rating.
Wynn Resorts (WYNN) is up 1.4% to $162.33 after Stifel upgraded it to Buy. - T.R.
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