5 Things You Need to Know Before the Market Opens - July 14
Updated from 6:56 a.m. EDT with earnings from JPMorgan Chase.
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Here are five things you should know for Thursday, July 14:
1. -- U.S. stock futures were pointing solidly higher Thursday after the Bank of England held the key bank rate at 0.50%, defying expectations that the central bank would lower the interest rate to combat the impact of the U.K.'s decision to leave the European Union in June.
European stocks were mostly higher, though shares in London declined shortly after the BOE released its statement.
Asian shares finished the trading session mixed. Japan's Nikkei 225 rose almost 1% as the yen weakened against the dollar.
Oil prices in the U.S. early Thursday rose 1.8% to $45.56 a barrel.
The Federal Reserve could raise interest rates up to two times before the end of the year, said Philadelphia Fed President Patrick Harker on Wednesday, revising lower his expectations for monetary tightening even though he said the economy is on "fairly firm footing."
Harker, when he last spoke in May, predicted two to three rate increases this year.
He also downplayed any effects of the U.K.'s vote to leave the European union. Harker predicted that inflation would hit a 2% target in 2017 and that the Fed would raise rates toward 3% by the end of 2018, CNBC reported.
"Considering the economic projections, I anticipate that it may be appropriate for up to two additional rate hikes this year," said Harker, who does not vote on policy this year.
The economic calendar in the U.S. Thursday includes weekly Initial Jobless Claims at 8:30 a.m. EDT, and the Producer Price Index for June at 8:30 a.m.
U.S. stocks on Wednesday rose but Wall Street's big three-day rally lost a little steam with bulls given little reason to continue charging much higher.
The S&P 500 rose slightly, adding 0.01%. The Dow Jones Industrial Average rose 0.13% and the Nasdaq declined 0.34%.
2. -- Chinese conglomerate Dalian Wanda Group is reportedly looking to add more content to its film distribution capacity by taking a minority stake in Viacom's (VIAB) - Get Report Paramount Pictures unit.
The Los Angeles Times said a 49% stake is under discussion, while Reuters also reported that the Chinese company has held talks with Viacom about the purchase.
The reported discussions come as Viacom CEO Philippe Dauman fights a bitter court battle with Shari Redstone, Viacom's vice chairman and the daughter of ailing controlling shareholder Sumner Redstone.
Paramount itself has become a flashpoint for the fight, with a sale of Paramount not possible without the consent of Redstone senior.
The Wall Street Journal, citing people familiar with the discussion, reported that another, undisclosed, suitor is also on the hunt for Paramount.
3. -- Yum! Brands (YUM) - Get Report reported better-than-expected second-quarter earnings, due mostly to improved results in China and share repurchases.
Earnings, excluding one-time items, rose 9% from the prior year to 75 cents a share vs. Wall Street estimates of 74 cents. Total sales fell 3% from a year earlier to $3.01 billion, missing analyst forecasts of $3.09 billion, as Yum! Brands was hurt by the strength of the U.S. dollar.
The company also hiked its full-year operating profit growth forecast to 14% from 12%, citing improved trends in China.
Yum!, however, did report that sales at Taco Bell's more than 6,400 U.S. restaurants fell 1% in the second quarter. A year earlier, sales at the late-night fast-food stop rose a healthy 6%. It marked the second consecutive quarterly sales slowdown for Taco Bell, and followed a meager 1% gain in the first quarter.
In a statement, Yum! Brands CEO Greg Creed acknowledged "challenging conditions" in the U.S.
Yum! shares rose 3.1% in premarket trading to $88.36.
In other earnings news, railroad operator CSX (CSX) - Get Report said second-quarter profit fell nearly 20% as as freight volume slowed 9% but earnings and revenue surpassed analysts' expectations.
The company posted adjusted earnings of 47 cents a share, beating analysts' estimates of 44 cents.
CSX said it expects that full-year earnings will continue to decline, reflecting the "ongoing transition in the energy markets" and the impact of a stronger dollar and lower commodity prices.
JPMorgan Chase (JPM) - Get Report posted second-quarter profit on Thursday of $1.55 a share, topping estimates of $1.43.
The bank reported revenue of $25.2 billion, also beating Wall Street expectations.
The stock rose 2.2% in premarket trading.
4. -- Monsanto (MON) has revived talks with BASF about a possible combination of their agrochemicals businesses, Bloomberg reported, citing people familiar with the matter.
The news follows Monsanto's recent rejection of a $62 billion takeover offer from Bayer.
Monsanto, the seeds giant, is exploring various transactions, including the potential acquisition of BASF's agriculture-solutions unit, the people told Bloomberg. In return, Germany's BASF would likely receive newly issued shares in Monsanto, the people said. Discussions are at an early stage, and no final decisions have been made as talks with Bayer are continuing, they added.
Monsanto shares were down 0.6% in premarket trading.
5. -- The European Union's antitrust regulator is expected to file additional formal charges against Alphabet's (GOOGL) - Get Report Google on Thursday, the Journal reported, citing several people familiar with the matter
The European Commission is expected to issue a so-called statement of objections accusing Google of breaching EU antitrust rules by imposing strict contractual terms with its advertising service, the people told the Journal. The EU is also set to issue a supplementary charge sheet over Google's conduct relating to its shopping service, the people said.
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