With yesterday's Fed meeting out of the way, and today's ECB meeting a non-event, all focus is firmly back on trade, as evidenced by this morning's swings in the market. Early on, futures were pointing to a lower open after a Reuters report was read to indicate that the U.S. was getting ready to go forward with its China tariff threat this weekend. However, the tone changed after a more hopeful tweet from President Trump and a more encouraging trade talks report from The Wall Street Journal.
ECONOMIC EVENTS: In the U.S., initial jobless claims surged 49,000 to 252,000 in the week ended December 7. The Producer Prices Index for November undershot estimates with a flat headline figure and a 0.2% core price drop reported.
On the trade front, President Donald Trump tweeted right after the market open that the U.S. is "Getting VERY close to a BIG DEAL with China. They want it, and so do we!" Soon afterward, Lingling Wei and Bob Davis of The Wall Street Journal reported that U.S. trade negotiators have offered to cut existing tariffs by as much as half on roughly $360B of Chinese-made goods, as well as to cancel a new round of tariffs set to take effect on December 15. In exchange, the U.S. has demanded that China make firm commitments to purchase large quantities of U.S. agricultural and other products, to better protect U.S. intellectual-property rights and to allow greater access to China's financial services sector, sources told the Journal.
In Europe, Christine Lagarde oversaw her first policy meeting as head of the European Central Bank, after which the ECB said it will keep its key interest rates unchanged and keep its asset purchase program running "for as long as necessary to reinforce the accommodative impact of its policy rates." Additionally, the U.K. election, which is hoped to pave the way for a Brexit deal, is in focus as voters there head to the polls.
TOP NEWS: Shares of General Electric (GE) have risen 3% after UBS analyst Mark Mittermaier assumed coverage of the stock with a Buy rating and price target of $14. This is an upgrade in the firm's rating, as prior analyst Damian Karas previously had a Neutral rating and $11.50 price target on the shares.
Delta (DAL) shares also were trending upward, rising 3% after the air carrier at its investor day provided earnings guidance for fiscal 2020, with CEO Ed Bastian saying, "We are executing well against our strategic priorities and on track for a record 2019 - a testament to the incredible work of Delta employees worldwide who serve our customers with a focus on providing exceptional travel experiences each and every day."
In other airline news, Southwest Airlines (LUV) announced that it reached a confidential agreement with Boeing (BA) to compensate the airline for a portion of projected financial damages related to the grounding of the airline's Boeing 737 MAX planes. The move comes a day after the Federal Aviation Administration said that regulators likely won't clear the 737 MAX aircraft for flight until 2020.
On the earnings front, shares of Lululemon Athletica (LULU) fell 5% despite the athletic apparel maker reporting better than expected earnings and revenue for the third quarter and raising its guidance for fiscal 2019.
MAJOR MOVERS: Among the noteworthy gainers was Amneal Pharmaceuticals (AMRX), which surged 48% after it received Abbreviated New Drug Application approval from the FDA for EluRyng. Also higher were Ciena (CIEN) and Photronics (PLAB), which gained a respective 15% and 9% after reporting quarterly results.
Among the notable losers was RH (RH), which slid 5% after the company said that chairman and CEO Gary Friedman sold an aggregate of 500,000 common shares in the company from December 9 through December 11. Also lower was Nordson (NDSN), which fell 3% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 116.66, or 0.42%, to 28,027.96, the Nasdaq was up 25.47, or 0.29%, to 8,679.53, and the S&P 500 was up 15.39, or 0.49%, to 3,157.02.
