Here are five things you must know for Tuesday, Jan. 29:
1. -- Stock Futures Mixed Amid Trade Tensions
U.S. stock futures were mixed on Tuesday, Jan. 29, as investors worried that a U.S. decision to pursue criminal charges against the chief financial officer of China's biggest tech company could stall progress in trade negotiations between the world's two biggest economies that are set to resume this week.
The move to charge Weng Wanzhou, chief financial officer of Huawei Technologies Co., came just days before China Vice Premier Liu He is set to arrive in Washington for high-level trade talks that both sides hope can push negotiations forward as a March 1 deadline approaches.
"The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the asserted violations," Huawei said in a statement.
Meng, who also is the daughter of the company's founder, was arrested in Canada last month at the request of the U.S. on charges she misled authorities about its business in Iran in order to get around U.S. sanctions. The U.S is seeking to extradite her to face charges in the U.S.
U.S. Commerce Secretary Wilbur Ross insisted the charges were "totally separate" from the trade talks. But the timing of the charges could be seen as a major risk to an agreement, particularly given the fact that a host of U.S. companies have cited slowing China growth as a reason for weaker-than-expected fourth-quarter earnings and tepid 2019 profit outlooks.
Contracts tied to the Dow Jones Industrial Average rose 10 points, futures for the S&P 500 were flat, and Nasdaq futures declined 5 points.
2. -- Fed Likely to Hold Off on Raising Rates as Two-Day Meeting Begins
The Federal Open Market Committee begins a two-day meeting on Tuesday, with the policy-setting arm of the Federal Reserve expected to maintain the target range for the federal funds rate at 2.25% to 2.5%. Most economists don't expect a rate hike from the Fed until at least June.
Indeed, the collective concern over U.S. profits, triggered by a slowdown in China that is at least in part the result of U.S. trade policy, has many investors betting the Fed won't signal a desire to tighten monetary policy over the near term. An announcement from the Fed on interest rates is expected Wednesday afternoon.
The economic calendar in the U.S. Tuesday includes International Trade in Goods for December at 8:30 a.m. ET, the S&P Corelogic Case-Shiller Home Price Index for November at 9 a.m., and Consumer Confidence for January at 10 a.m.
3. -- Apple, AMD, Verizon, 3M and Pfizer Report Earnings Tuesday
3M Co. (MMM) reported fourth-quarter adjusted earnings of $2.31 a share, beating analysts' expectations of $2.28, but the maker of Scotch tape and Post-it Notes said it was cutting its 2019 earnings outlook to $10.45 to $10.90 a share from previous guidance of $10.60 to $11.05.
The company said it was positioned for a "successful 2019" despite increasing concerns over global demand linked to a slowdown in China.
3M shares rose 2.2%.
Pfizer Inc. (PFE) reported solid fourth-quarter earnings but issued weaker-than-expected 2019 guidance as the exclusivity of its key epilepsy treatment Lyrica comes to an end. The stock fell 2% in premarket trading.
Pfizer said earnings for the three months ended in December were 64 cents a share, topping the Wall Street consensus of 63 cents. Revenue was $13.98 billion, Pfizer said, up 2% from the fourth quarter of 2017 and ahead of the $13.9 million estimate.
Looking into 2019, however, Pfizer said it expects full-year earnings of between $2.82 and $2.92 a share, notably lower than the Refinitiv forecast of $3.04, and sales in the range of $52 billion to $54 billion.
Verizon Communications Inc. (VZ) earned $1.12 a share on an adjusted basis in the fourth quarter, topping analysts' estimates by 3 cents, as revenue of $34.3 billion came in slightly below forecasts.
The company said fourth-quarter retail postpaid net additions were 1.2 million, including 653,000 phone net additions and 873,000 postpaid smartphone net additions. Fios internet net additions in the quarter were 54,000, beating forecasts of 45,300.
The telecommunications giant said it expects adjusted earnings in 2019 similar to 2018's adjusted profit of $4.71 a share. It added it sees "low single-digit percentage growth in full-year consolidated revenues on a GAAP reported basis." The stock fell 1.9%.
- Apple Reports Earnings on Tuesday: 5 Important Things to Watch
- Earnings Preview: Apple, AMD, Verizon, Other Giants to Report Crucial Fourth Quarter
4. -- PG&E Corp. Files for Bankruptcy Protection
PG&E Corp. (PCG) filed for Chapter 11 bankruptcy protection Tuesday as the California utility, the largest in the nation, seeks to manage liabilities that could reach as high as $30 billion related to the state's deadly wildfires in 2017 and 2018.
PG&E, which filed the request in the U.S. Bankruptcy Court for the Northern District of California, also is seeking $5.5 billion in so-called debtor-in-possession financing to fund its ongoing operations and safety initiatives.
"Our most important responsibility is and must be safety, and that remains our focus. Throughout this process, we are fully committed to enhancing our wildfire safety efforts, as well as helping restoration and rebuilding efforts across the communities impacted by the devastating Northern California wildfires," said interim CEO John Simon. "We also intend to work together with our customers, employees and other stakeholders to create a more sustainable foundation for the delivery of safe, reliable and affordable service in the years ahead."
PG&E shares closed Monday at $12.01, giving the company a market value of around $6.32 billion. The stock was down 6.3% in premarket trading on Tuesday to $11.25.
The stock has lost more than three quarters of its value since PG&E warned in November that it faced "significant" liability, over and above its insurance capacity, if its equipment was found to have started the deadly Camp Fire that started in Paradise, Calif., and spread through much of Northern California, killing at least 86 people and causing billions in economic and environmental damage.
5. -- Nevada to Fine Wynn Resorts Over Sexual Misconduct Allegations
Nevada gambling regulators announced a settlement Monday with casino mogul Steve Wynn's former company, Wynn Resorts Ltd. (WYNN) , over allegations that former executives failed on multiple occasions to investigate claims of sexual misconduct against him.
The Nevada Gaming Control Board detailed at least seven allegations of misconduct by Wynn dating to 2005 in which former executives and managers of Wynn Resorts became of aware of the claims but failed to act, the Associated press reported. The board also said Wynn's conduct was "inappropriate and unsuitable" and violated company policies.
Wynn resigned from his company last February and has denied any misconduct.
The control board's settlement with Wynn Resorts doesn't revoke or limit its gambling license but requires the company to pay a fine. The amount will be set by the Nevada Gaming Commission, but it wasn't immediately clear when that could occur, according to the Associated Press.
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