Here are five things you must know for Friday, Feb. 15:
1. -- Stock Futures Turn Higher Amid Progress in Trade Negotiations
U.S. stock futures were higher on Friday, Feb. 15, amid progress in U.S.-China trade talks though worries remained that weakening data from the world's two biggest economies could signal a deeper growth slowdown .
A twin set of inflation data from China underscored both export and domestic demand weakness in the world's second-largest economy, with factory gate inflation slowing for the seventh consecutive month in January -- to a 2016 low -- and consumer prices rising at the weakest pace in a year. The figures suggested China will struggle to reverse last year's broader economic slowdown, which was the worst in a decade.
The weakness in China followed data from the United States on Thursday that indicated the biggest fall in monthly retail sales since September 2009, a surprise reading that triggered significant markdowns in U.S. economic growth forecasts and pushed Wall Street to its biggest decline in a week. Retail sales in December plunged 1.2%.
The figures also added further pressure to U.S. and China trade talks, which concluded Friday in Beijing. U.S. Treasury Secretary Steve Mnuchin said the negotiations had been "productive," but markets remained concerned that significant progress might not be made prior to the March 2 trade deal deadline, which White House Economic Adviser Larry Kudlow said Thursday would remain in place.
The Wall Street Journal reported the U.S. and China could sign a memorandum of understanding that could serve as the framework for a deal that Donald Trump and Chinese leader Xi Jinping could later finalize at a summit.
Meanwhile, Trump is expected to declare a national emergency to free up funds to construct a border wall with Mexico, Senate Majority Leader Mitch McConnell announced, but he will sign funding legislation that would avoid another government shutdown.
Contracts tied to the Dow Jones Industrial Average rose 30 points, futures for the S&P 500 gained 2.75 points, and Nasdaq futures were up 7 points.
The economic calendar in the U.S. Friday includes the Empire State Manufacturing Survey for February at 8:30 a.m. ET, Import and Export Prices for January at 8:30 a.m., Industrial Production for January at 9:15 a.m., and Consumer Sentiment for February at 10 a.m.
PepsiCo Inc. (PEP) posted fourth-quarter earnings that were largely in line with analysts' forecasts, but said 2019 earnings would fall as the company boosts investments in some of its key consumer products. The stock rose 1% in premarket trading.
Pepsi said core earnings for the three months ended in December were $1.49 a share, matching the Wall Street forecast. Revenue also was in line and was essentially flat from the prior-year period at $19.524 billion.
Looking into 2019, Pepsi said core earnings would decline by 1%, thanks in part to "incremental investments that are intended to further strengthen the business," but noted the company should return to a "high-single-digit core constant currency EPS growth" rate the following year.
Deere & Co. (DE) reported first-quarter earnings of $1.54 a share, below estimates of $1.76. Revenue was $6.94 billion, higher than forecasts of $6.82 billion.
The company noted, however, that easing cost pressures would allow it to be "cautiously optimistic" on profits for the 2019 year.
Shares fell 3.3%.
2. -- Nvidia Jumps After Forecasting a Rebound in Gaming Chip Demand
Nvidia Corp. (NVDA) rose 5.7% in premarket trading Friday after the chip company posted stronger-than-expected fourth-quarter earnings and said sales for its current financial year would top Wall Street forecasts as key markets in China recover from their current slump.
Adjusted earnings in the fourth quarter were 80 cents a share, beating estimates of 62 cents, while revenue of $2.21 billion missed forecasts of $2.24 billion. The company had guided revenue expectations down significantly in late January to $2.2 billion from $2.7 billion.
Looking ahead, Nvidia said it sees full-year revenue that would be "flat to down slightly" from the $11.7 billion tallied in the 2019 financial year, a forecast that topped analysts' expectations, as gaming chip demand -- which makes up just under half of its top line -- rebounds following a clear-out of cryptomining-related inventory that should occur in the current quarter.
"China's an important market and it's an important gaming market. And I have every confidence this is going to rebound," CEO Jensen Huang told investors on a conference call. "The China economy is in the final analysis of growth economy. And so we're looking forward to it recovering. And gaming is one of the most important pastimes of their culture and so I'm excited about our prospects there."
- Nvidia Shares Jump as Chipmaker Sees Gaming Sector Rebound Driving 2020 Sales
- Nvidia Gains After Forecasting a Second-Half Rebound: 5 Key Takeaways
3. -- Canopy Growth's Revenue Soars
Canopy Growth Corp. (CGC) posted better-than-expected fiscal third-quarter revenue and said its chief financial officer plans to depart the company later this year.
The cannabis company posted a loss of 38 Canadian cents a share on revenue after excise taxes of C$83.1 million. In the same quarter a year earlier, Canopy Growth posted earnings of 1 Canadian cent a share on restated revenue of C$22 million.
The company had been expected to post a loss of 13 Canadian cents a share on revenue of C$61 million, based on a FactSet survey of five analysts.
Canopy said its chief financial officer, Tim Saunders, plans to retire in mid-to-late 2019.
The stock was up 5.6% in premarket trading.
Corona-owner Constellation Brands Inc. (STZ) last year invested $4 billion in Canopy Growth. TheStreet's Jim Cramer noted in an interview ahead of the earnings release that Canopy was in spending mode thanks to its strong balance sheet as it seeks to dominate the emerging cannabis market.
Canopy Growth became the first pot company to list its shares in the U.S. last year.
4. -- Facebook Reportedly Is Negotiating a Fine With the FTC
Facebook Inc. (FB) and the Federal Trade Commission are negotiating over a multi-billion dollar fine that would settle the agency's investigation into the social media giant's privacy practices, the Washington Post reported, citing two people familiar with the probe.
The fine would be the largest the FTC ever has imposed on a technology company, but the two sides haven't yet agreed on an exact amount. Facebook has expressed initial concern with the FTC's demands, one of the people told the Post. If talks break down, the FTC could take the matter to court.
Facebook confirmed it was in discussions with the FTC but declined to comment further. The FTC also declined to comment.
Facebook has been hit with a series of privacy lapses that may have put the personal information of its users at risk. Lawmakers have faulted the company for mishandling that data while failing to crack down on other digital ills, including the rise of online hate speech and the spread of disinformation from Russian operatives and other foreign actors, the Washington Post noted.
5. -- Berkshire Hathaway Dumps Stake in Oracle
Oracle Corp. (ORCL) declined 1.9% in premarket trading Friday after Securities and Exchange Commission filings showed that Warren Buffett's Berkshire Hathaway Inc. (BRK.A) dumped its entire stake in the software company only months after revealing its $2 billion investment.
Berkshire Hathaway told the SEC in a filing in November that it had owned 41.4 million shares in Oracle at the end of the end of the third quarter after it had exited a holding in International Business Machines Corp. (IBM) earlier in the year.
Berkshire Hathaway also reduced its stake in Apple Inc. (AAPL) , taking the overall holding to just under $40 billion, although the company told Reuters that the decision to sell wasn't taken by Buffett himself.