Here are five things you must know for Friday, Feb. 22:
1. -- Stocks Rise as Trump to Meet With China's Vice Premier
U.S. stock futures rose on Friday, Feb. 22, and global stocks traded higher as investors continued to monitor the U.S.-China trade talks while navigating weaker-than-expected data in some of the world's biggest economies.
Contracts tied to the Dow Jones Industrial Average rose 128 points, futures for the S&P 500 gained 12 points, and Nasdaq futures were up 39.75 points.
China's vice premier, Liu He, is scheduled to meet with Donald Trump in the Oval Office later Friday as this week's round of trade talks winds down in Washington. Multiple media reports suggested significant progress has been made between the two sides, with the very real possibility that next week's March 1 deadline for a trade deal could be extended. Issues such as intellectual property protection and currency manipulation remain sticking points in the months-long talks, however.
Set against that optimism has been a series of weaker economic data points, including softer-than-expected existing home sales in the United States, slower manufacturing output in Europe and the first contraction in business activity in the U.S. mid-Atlantic region in nearly three years.
The economic calendar in the U.S. Friday is light but several Federal Reserve officials have speaking engagements planned. Among the highlights: New York Federal Reserve Bank President John Williams will take part in a panel discussing the "Prospects for Inflation with a High-Pressure Economy" held by the Chicago Booth School of Business in New York at 10:15 a.m. ET, while Fed Vice Chairman Richard Clarida and St. Louis Fed President James Bullard will participate in a panel on "The Future of the Federal Reserve's Balance Sheet" in New York at 1:30 p.m.
2. -- Kraft Heinz Plunges After $15.4 Billion Writedown, SEC Subpoena, Dividend Cut
Kraft Heinz Co. (KHC) was sliding more than 20% in premarket trading Friday to $38.45, an all-time low, after the company posted a fourth-quarter loss of nearly $13 billion, said it had received a subpoena from the Securities and Exchange Commission, and planned to slash its dividend.
The company also said it received a subpoena from the SEC in October 2018 "associated with an investigation into the company's procurement area, more specifically the company's accounting policies, procedures, and internal controls related to its procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with its vendors."
Kraft Heinz reported a fourth-quarter loss of $12.61 billion, or $10.34 a share. The period included a charge of $15.4 billion for writing down the value of some of its key brands, such as the Kraft and Oscar Mayer trademarks. Adjusted earnings were 84 cents a share, below analysts' estimates of 94 cents. Revenue in the quarter was $6.89 billion vs. estimates of $6.94 billion.
Kraft Heinz said it would cut its quarterly dividend to 40 cents a share from 62.5 cents.
The company said it expects to "take a step backwards" this year. Kraft Heinz, one of Warren Buffett's key investments, said it sees 2019 earnings in the region of $6.3 billion to $6.5 billion, down 8.24% from last year at the higher end and well shy of the Wall Street consensus forecast of $7.5 billion.
"While we expect to take a step backwards in 2019, we remain confident in delivering consistent profit growth from 2020 onwards, driven by fully leveraging our advantage brands, cost structures and capabilities," Chief Financial Officer David Knopf told investors on a conference call.
3. -- Pinterest Files for IPO, Seeks Valuation of $12 Billion
Social media company Pinterest Inc. filed confidentially for an initial public offering, The Wall Street Journal reported, citing sources familiar with the matter.
Pinterest, a platform for online image searches, has filed paperwork with the Securities and Exchange Commission. The company is seeking a $12 billion valuation in the offering, and is aiming to go public in June, according to the Journal. CEO Ben Silbermann said several months ago that he wanted the company to go public in April.
Pinterest's investment bankers will reportedly be Goldman Sachs Group Inc. and JPMorgan Chase & Co.
Pinterest was founded in 2010, and as of September 2018 had 250 million monthly active users. The platform's revenue stream comes from ads scattered across its site. Revenue was more than $700 million for 2018, sources told the Journal.
4. -- Stamps.com Sinks After It Ends Partnership With U.S. Postal Service
Shares of Stamps.com Inc. (STMP) plummeted 47.5% to $104 in premarket trading Friday after the online shipping and postage company said its key partnership with the United States Postal Service has ended.
The stock already had taken a beating during trading on Thursday after it unveiled, with little explanation, a gloomy earnings forecast for 2019.
In a conference call with analysts after the stock market closed, Kenneth Thomas McBride, Stamps.com's chairman and CEO, revealed the reason for the dismal projections, detailing the split with the USPS.
The breakup came after Stamps.com said it no longer wants to be exclusive with the Postal Service, terms that the postal service refused to accept, McBride told analysts.
"We will no longer be exclusive to the USPS and that's non-negotiable," McBride said on the earnings call.
Stamps.com may pay a steep price for seeking independence from the USPS, with the online shipper now projecting earnings per share of $5.15 to $6.15 and revenue of $540 million to $570 million, well below analysts' estimates that called for 2019 earnings of $10.79 a share based on revenue of just more than $689 million.
5. -- Barrick Gold Studies a Bid for Newmont Mining - Report
Barrick has looked on and off at the feasibility of an offer for Newmont for some time, including in recent months, the people told Bloomberg. One possibility that Barrick has studied would involve teaming up with a partner, such as Newcrest Mining Ltd. (NCMGF) , in a bid for Newmont, the people said.
It's unclear whether Barrick is currently considering any transaction, the people said.
Barrick and Newmont were close to a merger in 2014 before talks broke down at the last minute over disagreements on the terms of the deal, Bloomberg noted.
Shares of Newmont Mining were rising 3.1% in premarket trading.