Here are five things you must know for Thursday, July 19:
1. -- Stocks Lower on Trade War Worries
U.S. stock futures pointed lower on Thursday, July 19, and global shares traded mostly to the downside as trade war concerns held down gains.
Data from Japan on Thursday illustrated the broader trade war concerns, with exports from the world's third-largest economy to the United States falling 0.9% in June - the first decline in 17 months - even as the country's trade surplus swelled to $5.24 billion thanks to slowing imports of American-made goods.
U.S. companies, as well, have begun questioning the impact of Donald Trump's trade policies, according to the Federal Reserve's "Beige Book" survey of regional business sentiment for June. The Fed said manufacturers in all 12 of the districts it polled "expressed concern about tariffs and in many districts reported higher prices and supply disruptions that they attributed to the new trade policies."
Federal Reserve Chairman Jerome Powell echoed those concerns during his second day of testimony to congressional lawmakers in Washington, telling the House Financial Services Committee that while "we don't see it in the aggregate numbers yet because it is a $20 trillion dollar economy and these things take time to show up ... we hear many many stories of companies that are concerned and are now beginning to make investment decisions, or not make them, because of this."
Contracts tied to the Dow Jones Industrial Average
The economic calendar in the U.S. on Thursday includes weekly Jobless Claims at 8:30 a.m. ET, Philadelphia Fed Business Outlook Survey for July at 8:30 a.m., and Leading Indicators for June at 10 a.m.
2. -- IBM Rises as Earnings Top Forecasts
International Business Machines Corp. (IBM) rose 2.5% in premarket trading after second-quarter adjusted earnings of $3.08 a share beat estimates and revenue rose to $20 billion from $19.3 billion a year earlier.
IBM also reiterated full-year guidance for earnings of "at least" $13.80 a share and free cash flow of around $12 billion.
Driving the tech giant's second-quarter beat was its systems segment, which covers sales of hardware and related operating systems. Revenue rose 25% to $2.18 billion, easily beating estimates of $1.85 billion.
But while the systems segment outperformed, IBM's cognitive solutions segment, which covers much of the company's software operations and is by far its most profitable segment, posted revenue of $4.58 billion, which was up just fractionally from a year earlier and below consensus of $4.76 billion.
On a conference call, Chief Financial Officer Jim Kavanaugh said revenue in IBM's cognitive solutions segment was pressured by "transitions" in talent, collaboration and commerce software businesses, while he insisted that IBM was working on modernizing its offerings in those fields. Regardless, cognitive solutions's performance continues to trail that of software peers such as Microsoft Corp. (MSFT) and SAP SE (SAP) , according to TheStreet's Eric Jhonsa.
3. -- Microsoft, Danaher, Nucor Report Earnings
Danaher Corp.'s (DHR) second-quarter profit of $1.15 a share beat Wall Street's expectations by 6 cents. The company also raised its earnings outlook for the fiscal year. Shares rose 2.2% in premarket trading.
Domino's Pizza Inc. (DPZ) fell 4.8% in premarket trading after second-quarter revenue of $779.4 million missed top-line estimates.
Travelers Cos. (TRV) posted second-quarter earnings that missed expectations and shares tumbled 2.3%.
4. -- John Schnatter Held Talks to Merge Papa John's With Wendy's
John Schnatter, Papa John's International Inc.'s (PZZA) founder and recently ousted chairman, held talks to merge the pizza company with Wendy's Co. (WEN) , The Wall Street Journal reported, citing people familiar with the matter.
Separately, Schnatter said it was "a mistake" for him to resign as chairman. In a letter to the board, he accused it of pressuring him to resign without investigating. Schnatter also accused the board of acting on the basis of "rumor and innuendo."
5. -- UnitedHealth Eyes Tenet's Conifer Subsidiary - Report
A story in the online edition of The Wall Street Journal, citing people familiar with the matter, reported late Wednesday, July 18, that it wasn't known who the other potential suitors were for Conifer, a business which accounted for 8% of Tenet's revenue last year. The report also noted there's no certainty UnitedHealth will make a deal for Conifer, and that Tenet may not sell the business.
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