The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, April 26, 2020.
Jeena Moon | Reuters
Stocks swung wildly in Friday’s volatile session amid trade worries and weak economic data. Investors digested a record drop in retail sales, while monitoring signs of increased trade tensions with China. Major U.S. equity averages are on track to post big losses for the week. Here’s what’s happening:
11:10 am: Here are Friday’s biggest analyst calls of the day
- Stifel upgraded Yum! Brands to buy from hold.
- BMO upgraded Goldman Sachs to outperform from market perform.
- UBS upgraded Cardinal Health to buy from neutral.
- Citi downgraded Wayfair to sell from hold.
- KeyBanc downgraded KB Home and PulteGroup sector weight from overweight.
- Citi initiated Microsoft as neutral.
- Bank of America downgraded Canada Goose to underperform from neutral.
- Guggenheim named Pepsi a best idea.
- Cowen upgraded Northrop Grumman to outperform from market perform.
CNBC Pro subscribers can read more here. — Bloom
10:21 am: Retail ETF turns positive, led by Office Depot and Dillard’s
The SPDR S&P Retail ETF turned positive in morning trading despite the record drop in retail sales. The fund last traded up 0.9% after dropping about 1.5% earlier in the session. The turnaround was led by strong gains in Office Depot and Dillard’s which both rose more than 10%. –Li
10:15 am: Dow erases opening losses, turns positive
Less than an hour into Friday’s trading, the Dow Jones Industrial Average erased a 270-point loss and climbed into positive territory. -Li
10:08 am: Consumer sentiment for early May comes in higher than expectations
The early May read on consumer sentiment in the U.S. came in at 73.7, up from 71.8 in April, according to preliminary data released Friday by the University of Michigan. Economists polled by Dow Jones expected U.S. consumer sentiment to drop to 65 in May. –Li
9:56 am: New York manufacturing slumps but beats estimates
Business activity continues to contract in New York, though not as bad as economists had feared. The New York Fed’s Empire State Manufacturing Survey saw a reading of -48.5%, which signified a sharp contraction but not as bad as Dow Jones estimates of -60. The index measures companies reporting expansion against those seeing contraction, which in the May survey was 14.5% vs. 63.% respectively. Both new orders (-42.4%) and shipments (-39%) showed a continuing downturn but were significantly better than the April gauges. Notably, the employment reading was -6.1%, as 14.7% of employers reported increasing staff while 20.8% said they are seeing decreases. That net measure, though, was far better than the -55.3% reported in April. – Cox
9:50 am: Cramer on signs of US-China trade escalation: ‘Are we crazy?’
CNBC’s Jim Cramer said Friday that now is not the time for the U.S. and China to escalate trade tensions as the world already faces unprecedented economic calamity from the coronavirus pandemic. “What are we crazy?” Cramer asked, adding the prospect of retaliation from China is “scary.” The “Mad Money” host’s comments come after the Trump administration’s move to block semiconductor shipments to Huawei. –Li, Belvedere
9:36 am: Retail store sales by category, clothing stores took biggest hit
All but one of 13 major retail categories experienced declines in sales in April. Clothing stores took the biggest hit with a 78.8% drop, while electronics and appliance stores saw a 60.6% decline. Non-store sales, which includes online sellers, is the only category with gains. –Li
9:30 am: Stocks open lower, Dow down 200 points
Major U.S. equity averages traded lower at the open as a record drop in retail sales dented sentiment as signs of increased trade tensions with China added to investors’ anxiety. The Dow Jones Industrial Average fell about 200 points, while the S&P 500 dipped 0.9%. The Nasdaq Composite declined 1.1% at the open. — Li
8:30 am: Retail sales plunge a record 16.4% in April
Consumer spending sank by a record 16.4% in April as a main component of the U.S. economy contracted amid the Covid-19 outbreak, according to a government report Friday. Economists surveyed by Dow Jones expected the advanced retail sales number to fall 12.3%. Some 68% of the U.S.’s $21.5 trillion economy is derived from personal consumption expenditures, which tumbled 7.6% in the first quarter as social distancing measures began to take effect. — Cox, Franck
8:10 am: Barclays raises oil target
Barclays raised its target on West Texas Intermediate and Brent on Friday, saying that while prices will likely remain volatile in the short term as the market re-balances, the worst is now over. “Market forces have aligned producers around the world to support fundamentals and demand is increasingly showing signs of having troughed,” the firm said. Barclays sees WTI and Brent averaging $33 and $37 this year, respectively, before rebounding to $50 and $53 in 2021. WTI traded around $28.23 per barrel on Friday, with Brent at $31.70. — Stevens
8 am: China insider says the country could activate ‘unreliable entity list’ to retaliate
Hu Xijin, editor-in-chief of Chinese state-run publication Global Times, said in a tweet Friday that if the U.S. takes further action to block supply to Huawei, China will activate the “unreliable entity list”, “restrict or investigate” U.S. companies including Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes. His comment came after the White House moved to prevent shipments of semiconductors to the Chinese telecom giant as tensions between the two nations flared up again amid the coronavirus pandemic.
The companies Hu mentioned came under pressure in premarket trading Friday with shares of Qualcomm and Cisco dropping 5.3% and 2.3%, respectively. Apple also fell 2.4% in premarket, while Boeing dipping 3.5%. Hu’s Twitter account was closely followed by many Wall Street traders for insight on the trade war last year. His commentary appeared to have inside knowledge about the U.S.-China trade relationship and has sometimes been market-moving. The Global Times is a tabloid under the People’s Daily which is the official newspaper of the Communist Party of China. — Li
7:55 am: Consumer purchases probably hit a new record low in April
Retail sales are expected to hit new depths in April as wary consumers stayed home and bought mainly essentials online. The advance reading, to be released Friday at 8:30 a.m. ET, is expected to show a plunge of 12.3%, according to economists surveyed by Dow Jones. That comes a month after a record 8.7% drop for data that goes back to 1992. The previous low was a 3.8% decline in November 2008 during the financial crisis. Consumers account for about 68% of all U.S. economic activity, so the retail figures are critical. — Cox
7:50 am: Chip stocks fall amid Huawei worries
Semiconductor stocks fell in premarket trading after the Commerce Department said it would move to block the sale of chips to Chinese telecom giant Huawei. Shares of Micron were trading 3.4% lower, while Nvidia fell roughly 2%. Broadcom and Intel both slipped 1.8%. — Pound
7:43 am: White House moves to block chips to China’s Huawei
The Trump administration on Friday took action to prevent shipments of semiconductors to China’s telecom giant Huawei Technologies. The Commerce Department said it was changing an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” The company has for months been in the crosshairs of a broader U.S.-China trade battle and the latest announcement is likely to take a toll on the globe’s second-largest smartphone maker. — Franck
7:30 am: Stock futures point to Friday losses
U.S. stock futures pointed to losses to start the regular session Friday as investors braced for what’s expected to be a grim report on April’s retail sales at 8:30 a.m. ET, which will provide a key insight into U.S. household spending in recent weeks. Wall Street is also monitoring U.S.-China relations after the White House took action to block shipments of semiconductors to Huawei from the world’s chipmakers. The move could, in tandem with the administration’s prior move to ban federal retirement investment in Chinese stocks, lead to renewed angst between the globe’s two economic superpowers. — Franck
— CNBC’s Jeff Cox and Pippa Stevens contributed to this report.
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