Stock futures fell in early morning trading after Bloomberg reported that China is looking to further talks to hammer out the final details of Friday's “phase one” trade deal that they were reluctant to even call a deal yet. However, Treasury Secretary Steve Mnuchin took to CNBC to refute that view, acknowledging that while an agreement hadn't been fully documented and signed, he viewed it as a "substantial" deal that he expects to be signed before tariffs scheduled for December take effect. Mnuchin appeared to ease some of the markets worries and futures recovered from there forward, leading to a slow-moving session marked by lighter volumes and mixed performances for the major averages. A bit of a quiet trading day was not surprising given that the Columbus Day holiday closed the bond market.
ECONOMIC EVENTS: In the U.S., no economic data of note was released this morning.
In Europe, reports pointed to a lack of progress in Brexit negotiations over the weekend. Eurozone industrial production for September grew 0.4% year-over-year, which was a bit better than the expected 0.3%.
China’s trade data for September was underwhelming, with imports down 8.5% year-over-year and exports down 3.2%, both of which were worse than consensus forecasts.
TOP NEWS: On Friday evening, after the market close, Boeing announced that its board of directors has separated the roles of chairman and chief executive officer. Dennis Muilenburg continues as CEO, president and a director, while David Calhoun, current independent lead director, will now serve as non-executive chairman. Subsequently, The New York Times' Natalie Kitroeff and David Gelles reported that the decision to strip Muilenburg of his chairman title came after months of internal debate over whether to hold top executives accountable after the two deadly 737 MAX crashes that have grounded that aircraft.
Facebook (FB) was a target, again, for presidential hopeful Elizabeth Warren, who made headlines with her fake headlines. Warren has purchased ads on Facebook that falsely claim Mark Zuckerberg has endorsed President Donald Trump in a ploy used to support her view that ads posted by politicians need to be fact-checked. The Democratic presidential candidate's campaign sponsored posts with a clearly identified lie, pushing back against Facebook's policy to exempt politicians' ads from its third-party fact-checking program.
In M&A news, Parsley Energy (PE) announced an agreement to acquire Jagged Peak Energy (JAG) in an all-stock transaction valued at approximately $2.27B, including Jagged Peak's net debt. Under the terms of the agreement, Jagged Peak shareholders will receive a fixed exchange ratio of 0.447 shares of Parsley Class A common stock for each Jagged Peak share, which the companies said represents $7.59 per Jagged Peak share based on Parsley's closing price on October 11. Following the merger announcement, Jagged Peak shares closed 1.5% lower, while Parsley shares dropped 10.6%.
MAJOR MOVERS: Among the noteworthy gainers was Revance Therapeutics (RVNC), which advanced 15.1% after the company announced the board-led removal of Dan Browne, who has stepped down "due to a misjudgment in handling an employee matter." Also higher was HP Enterprise (HPE), which gained 4.2% after Evercore ISI analyst Amit Daryanani upgraded the stock to In Line from Underperform, stating that he is incrementally more positive on cash flow resiliency, the Cray acquisition, and recent data points that indicate H3C is performing better than other OEMs in China.
Among the notable losers was SmileDirectClub (SDC), which sunk 12.8% after the Governor of California signed Assembly Bill 1519, which extends the state Dental Board’s authority to oversee and regulate dental services until January 1, 2024 and overhauls some rules regarding teledentistry. Also lower was IPG Photonics (IPGP), which fell 7.8% after Needham analyst James Ricchiuti downgraded the stock to Hold from Buy, citing signs of a "stagnant" global manufacturing environment along with continued competitive concerns. The analyst notes that while investors cheered last week's partial China trade deal, he is "not convinced" that the underlying demand picture in some of the company's key end markets will be changed "meaningfully".
INDEXES: The Dow lost 29.23, or 0.11%, to 26,787.36, the Nasdaq fell 8.39, or 0.10%, to 8,048.65, and the S&P 500 declined 4.12, or 0.14%, to 2,966.15.
