Here are five things you must know for Friday, June 28:
1. -- Stocks Rise as China Rebounds
U.S. stock futures rose on Friday, June 29, and
rebounded as a turnaround in China shares, as well as a weakening of the U.S. dollar, eased pressure in Asia even as investors continued to fret about the trade war impact on broader economic growth.
A gain of 2.2% for the Shanghai Composite sparked the global rebound and led regional shares higher, with the Hang Seng in Hong Kong rising 1.6% and Japan's Nikkei 225 Index closing with a gain of 0.15%.
Contracts tied to the Dow Jones Industrial Average (^DJI) rose 94 points, futures for the S&P 500 (^GSPC) gained 9.25 points and Nasdaq (^IXIC) futures were up 26.75 points. Bank stocks seemed poised to lead the day's advance after most of the 35 lenders supervised by the Federal Reserve passed the second phase of stress tests that will allow them to increase dividends and share buybacks.
The U.S. economic calendar on Friday includes Personal Income and Outlays for May at 8:30 a.m. ET, Chicago PMI for June at 9:45 a.m., and Consumer Sentiment for June at 10 a.m.
Constellation Brands Inc. (STZ) - Get Report fell 4.9% in premarket trading on Friday after posting fiscal first-quarter adjusted earnings of $2.20 a share, below analysts' forecasts of $2.44. The wine and beer company said it expects fiscal 2019 earnings of $9.40 to $9.73 a share; analysts expect $9.73.
2. -- Deutsche Bank's U.S. Unit Fails Stress Test
Shares of Germany's Deutsche Bank AG (DB) - Get Report rose Friday even after receiving a fresh rebuke from the Federal Reserve over "critical deficiencies" in its financial planning, while Goldman Sachs Group Inc. (GS) - Get Report and Morgan Stanley (MS) - Get Report faced new restrictions in their planned dividends and stock buybacks.
The Fed said Thursday, June 28, it had identified "widespread and critical deficiencies" in the capital-planning practices of DB USA, Deutsche Bank's U.S. subsidiary. As a result, DB USA won't be able to pay out regular dividends to the German parent company at least until next year, a senior Federal Reserve official told reporters.
Goldman Sachs and Morgan Stanley, meanwhile, failed an annual "stress test" that required them to maintain adequate financial strength even following a severe recession and market downturn, according to the Fed. The two firms were barred from increasing their planned distributions to shareholders beyond the prior year's levels.
- Deutsche Bank Fails 'Stress Test' as Goldman, Morgan Stanley Face Curbs
- Deutsche Bank Shares Pop Despite Fed Stress Test Fail, But Concerns Remain
3. -- Nike Soars as North American Sales Bounce Back
Nike Inc. (NKE) - Get Report was rising 10.1% in premarket trading on Friday after the sneaker and sports apparel company posted fiscal fourth-quarter earnings and sales that topped analysts' forecasts.
Nike said a renewed focus on direct-to-consumer sales, fostered by a revamped online strategy and a partnership with Amazon.com Inc. (AMZN) - Get Report , helped boost North American sales more than 2.7% in the three months ended in May. That helped lift overall sales by 12.8% to $9.79 billion and translated into a bottom line of $1.14 billion, or 69 cents a share, which topped analysts' forecasts by 5 cents.
The Eugene, Ore.-based company said it now sees fiscal 2019 revenue growth in the "high single digit range" and forecast margin expansion of at least 50 basis points.
- Nike Shares Set for Record High Open After Big North American Turnaround
- Why Nike's Jordan Brand Isn't Flying as High These Days
4. -- Novartis to Spin Off Alcon
The Swiss pharmaceutical company, which is repositioning its portfolio to become more focused on medicine, said Alcon would be separated in the first half of 2019, and would be listed on the Swiss stock exchange. The unit could be worth up to $25 billion.
Shareholders will vote on the plans at the company's annual general meeting next February.
Novartis bought Alcon in a multistage process that began in 2009 and dragged on for more than a year after minority shareholders rejected bids, despite an agreement that secured a 77% stake in the business from its then controlling shareholder Nestlé SA. Novartis paid a total of $38.6 billion for the Nestlé stake and a further $12.9 billion to capture the remaining 23% in December 2010.
5. -- Xiaomi's Hong Kong IPO Raises $4.72 Billion
The initial public offering in Hong Kong of China's Xiaomi Corp. was priced at the bottom of an indicative range, raising $4.72 billion in the world's biggest tech float in four years, people close to the transaction said, Reuters reported.
Xiaomi's offering was at HK$17 a share ($2.17), the bottom of a price range of HK$17 to HK$22. The smartphone maker is selling about 2.18 billion shares, one of the people said, making the IPO the largest in the technology sector since Alibaba Group Holding Ltd. (BABA) - Get Report raised $25 billion in New York in 2014, Reuters noted.
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