Stock Futures Edge Higher Ahead of Fed; AT&T Ruling Stirs Late Trade

Stock futures were slightly higher in extended trade Tuesday, as a court ruling in Washington set in motion a frenzied after-hours reaction. Time Warner (TWX), Discovery Communications (DISCA), 21st Century Fox (FOX) and Express Scripts (ESRX) were just a few of the names spun into motion after the ruling.


Gains and losses among telecom stocks bracketed Tuesday’s late trade.

21st Century Fox and Discovery Communications led both the Nasdaq 100 and the S&P 500, although futures for both indexes slipped to fractional declines. Comcast (CMCSA) took the largest loss among Nasdaq 100 stocks. H&R Block (HRB) fell furthest among S&P 500 names.

Dow Jones futures rose 0.1% despite a heavy loss by Walt Disney (DIS) after the court decision. Nasdaq 100 futures rose 0.3% and S&P 500 futures were up less than 0.2%.

AT&T-Time Warner Deal Lurches Ahead

Time Warner scaled up nearly 6% after Tuesday’s close, following a ruling by a U.S. district judge to allow AT&T to move forward with its $85 billion acquisition of the company. The decision caps a 20-month effort to earn approval for a deal that will make AT&T the top U.S. distributor of pay TV. AT&T saw the deal as essential to its effort to compete for advertising dollars with internet content providers led by Facebook (FB) and Alphabet‘s (GOOGL) Google. The Department of Justice was reportedly considering filing an appeal to the ruling.

AT&T narrowed its early premarket loss to 1.6%. Comcast dropped 3.2%. Walt Disney dipped 1.3%. Discovery Communications jolted 5% higher. 21st Century Fox surged 4.3%. Fox ended Tuesday’s session near the top of a buy range, above a 38.66 buy point that it had initially cleared on May 8.

Health Care Stock Futures Jump

The AT&T ruling also sent a handful of health care names higher. Pharmacy benefits manager Express Scripts scrambled 5% higher. Regulatory resistance to the AT&T deal led investors to grow wary of Cigna‘s (CI) $52 billion effort to take over Express Scripts. Cigna shares were unchanged.

Tuesday’s ruling also eased investor concerns over CVS Health‘s (CVS) $69 billion bid to acquire Aetna (AET). Aetna rose 4% and CVS Health climbed 2% in late trade.

Fed Rate Vote And Outlook: ECB, BOJ Next In Line

The Time Warner ruling appeared set to shake the market out of the standard “lay low” pose it typically strikes ahead of key Federal Reserve decisions. Markets are geared for a quarter-point hike to between 1.75% and 2%. That would mark the Fed’s seventh increase since 2015. And views are split on whether the Fed is likely to hoist rates one or two more times during the second half of 2018.

The Fed offers up its official policy announcement at 2 p.m. ET. Markets will closely follow Fed Chairman Jerome Powell’s press conference, scheduled at 2:30 p.m. ET, seeking additional details on how Fed strategy might play out during the remainder of the year.

The European Central Bank meets to discuss its rate policy and the possible wind-down of its monetary stimulus program on Thursday. On Friday, the Bank of Japan has its monthly monetary policy meeting. Japan is expected to maintain its rate policy, with a 10-year government bond target yield near 0%.

Earnings: Pivotal Climbs, H&R Block Collapses

H&R Block swooned more than 17% after reporting fiscal fourth-quarter sales and earnings comfortably above analysts targets.

Pivotal Software (PVTL) reported after Tuesday’s close. Shares jumped more than 5% after revenue blasted past consensus expectations and losses were less than forecast. The San Francisco-based company also hoisted Q2 EPS and revenue guidance above estimates. The stock is extended after clearing an IPO base on June 6, ending Tuesday up 41% from its April IPO at 15 a share.

Staffing services leader Korn Ferry (KFY) and China’s BitAuto Holding (BITA) are scheduled to report quarterly results Wednesday morning.

Oil Price On Watch Ahead OF EIA Data

Oil prices could be a factor in Wednesday trade, as they slipped late Tuesday following weekly data from the American Petroleum Institute. Europe’s Brent crude benchmark fell 1.3%, while West Texas intermediate dipped less than 0.1% in late trading Tuesday.

Data released from the API showed a 730,000-barrel draw on U.S. oil inventories, well below consensus expectations for a 2.7-million-barrel drawdown. Earlier on Tuesday, news reports said Saudi Arabia had boosted its production back above 10 million barrels per day and had plans to increase by an additional 100,000 barrels in June.

The Energy Information Administration releases official oil inventory data at 10:30 a.m. ET on Wednesday.


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Originally posted 2019-09-19 23:16:04.


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