China Trade Pact, Boris Johnson, Oracle, Costco and Facebook - 5 Things You Must Know Friday

U.S. stock futures rise as investors cheer the possibility of a near-term trade agreement between the U.S. and China and the victory for Prime Minister Boris Johnson’s Conservative Party in the U.K. elections; Oracle slips after posting mixed earnings and saying it has no plans to name a co-CEO; FTC could seek injunction against Facebook.
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1. -- Stock Futures Rise as Wall Street Cheers Trade Agreement

U.S. stock futures rose Friday, pushing equities to fresh record highs, as investors doubled-down on bets for a near-term trade agreement between Washington and Beijing and cheered the victory for Prime Minister Boris Johnson’s Conservative Party in the U.K. elections.

Multiple reports said Donald Trump was prepared to suspend tariffs on China-made goods that were set to kick in on Dec. 15, and roll back levies put in place over the past 18 months, in exchange for a $50 billion agricultural purchase commitment that would form the so-called phase one trade agreement.

China's Foreign Ministry spokeswoman Hua Chunying only would say Friday that the government was committed to solving the ongoing trade issues in a "mutually beneficial" way, and no official word on details of the offer have emerged from the White House. Investors, however, appeared eager to bet the agreement could mark a notable thaw in the damaging trade dispute between the world's two biggest economies.

Contracts linked to the Dow Jones Industrial Average jumped 147 points, futures for the S&P 500 were up 15 points and Nasdaq futures rose 48.50 points. 

Stocks finished higher Thursday - and the S&P 500 and Nasdaq hit new record highs - after reports first surfaced that U.S. negotiators reached the terms of a phase-one trade deal with China that now awaits approval from Trump.

The economic calendar in the U.S. Friday includes Retail Sales for November at 8:30 a.m. ET, Import and Export Prices for November at 8:30 a.m. and Business Inventories for October at 10 a.m.

2. -- Boris Johnson's Win Sets Course for U.K. to Leave European Union

U.K. Prime Minister Boris Johnson celebrated the biggest victory of his political life with a vow to take Britain out of the European Union in January following what he called the “irrefutable, irresistible, unarguable decision of the British people." 

Johnson's Conservative Party won its largest Parliamentary majority in more than three decades on Thursday, securing at least 364 seats in the House of Commons and handing the Labour opposition its worst defeat since the 1930s. The result gives Johnson, the face of the 2016 referendum to leave the European Union, more than enough support to push through his stalled Brexit bill and pull Britain from the bloc as early as Jan. 31.

“It does look as if this one nation Conservative government has been given a new mandate to get Brexit done, and not just to get Brexit done but to unite the British people,” Johnson said during an acceptance speech.

“We must understand now what an earthquake we have created ... the way in which we have changed the political map in this country. We have to grapple with the consequences of that," he added. "We have to change our own party. We have to rise to the level of events. We have to rise to the challenge that the British people have given us.”

3. -- Oracle Slides on Mixed Earnings, No Plans for Co-CEO

Software giant Oracle (ORCL) - Get Report traded lower in premarket trading Friday after posting mixed second-quarter earnings and saying it has no plans to hire a co-CEO following the death of Mark Hurd earlier this year.

The company posted adjusted earnings in the quarter of 90 cents a share, topping analysts' forecasts by 1 cent, but revenue of $9.61 billion missed estimates of $9.65 billion. Revenue from cloud services and license support revenue in the quarter was $6.8 billion. 

As for hiring a co-CEO following Hurd's death in October at 62 years old, Chairman Larry Ellison told investors the company has "no plans for having a second CEO."

"It was an unusual situation, where Mark and Safra (Catz) were an absolutely fantastic team, but we have complete confidence in our existing management team." he added. "We're doing a lot of recruiting (and) we're hiring a bunch of people at the next layer down, who are potential CEOs when both Safra and I retire - which is not anytime soon. And so, we're going to strengthen the management team, but one of the strategies for strengthening that team is not to hire a second CEO."

The stock fell 1.77% to $55.47.

4. -- Costco Beats Profit Estimates but Stock Falls

Costco (COST) - Get Report, the warehouse retailer, fell 1% in premarket trading to $294.50 after reporting fiscal first-quarter earnings of $1.90 a share, topping analysts' forecasts of $1.73 and year-earlier earnings also of $1.73 a share.

The Issaquah, Wash., company earlier in December had reported that net sales rose 5.6% to $36.24 billion from $34.31 billion.

Comparable sales companywide for the quarter rose 4.3%, or 5% excluding the impact of gasoline prices and foreign-exchange fluctuations. U.S. comparable sales rose 4.7%, or 5% reflecting the exclusions.

E-commerce sales in the quarter, Costco said, were hurt by some 12 percentage points because the Thanksgiving through Cyber Monday retail sales rush occurred a week later than it did a year earlier. The timing knocked about 0.5% off total and comparable sales for the quarter.

Costco shares have risen nearly 46% so far in 2019.

5. -- FTC Could Seek Injunction Against Facebook Over How Its Apps Interact 

Facebook (FB) - Get Report edged higher in premarket trading, rebounding slightly from a 2.7% decline on Thursday, after a report said federal regulators were considering seeking an injunction against the social media giant related to how its apps operate with each other and with rivals.

The Federal Trade Commission could act as early as January, The Wall Street Journal reported.

An injunction could seek to stop Facebook from further integrating apps that regulators might look to separate as part of a future breakup of the company, according to one of the Journal's sources.

Alongside its core social network, Facebook’s main products are Instagram, Messenger and WhatsApp. The company has been moving to further integrate the products.

Regulatory pressures are one of three key challenges facing Facebook in 2020.

The stock was up 0.18% in premarket trading to $197.10.