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Fly Intel - End of Day Brief - Thursday Dec 5, 2019

Stocks end with small gains as U.S.-China talks reportedly "on track"

Stocks spent much of the trading day meandering in a quieter, lower-volume session than seen over the prior two days. While the calm was a change, what remained a constant was the market's strict reliance on trade headlines to determine its direction. Some reassurances from both the U.S. and Chinese sides that talks are moving forward managed to push the market toward very small gains in the end, though it is likely that the next set of trade headlines will determine how Friday's session will develop. 

ECONOMIC EVENTS: In the U.S., initial jobless claims fell 10,000 to 203,000 in the week ended November 30. The trade deficit narrowed 7.6% to $47.2B in October as exports declined 0.2% and imports dropped 1.7%. Factory orders increased 0.3% in October, which alongside a flat print on shipments and a 0.1% gain in inventories was a little shy of expectations.

In trade news, U.S. Treasury Secretary Steve Mnuchin was quoted by Reuters as having said that U.S. and China trade talks are "on track," but not bound by a specific deadline. Meanwhile, the Wall Street Journal reported that China's Commerce Ministry echoed this sentiment, though the Journal added that the two parties remain "at odds" over the value of farm goods China will buy from the U.S. and the two sides haven't yet agreed on how deep a reduction in tariffs the U.S. would make.

TOP NEWS: Analysts made stock-moving calls this morning on a number of the largest and most in-focus names on Wall Street, including Facebook (FB), Nike (NKE) and Apple (AAPL).

Stifel analyst John Egbert upgraded Facebook to Buy from Hold, telling investors that he is incrementally positive on the company's ability to sustain above-market ad revenue growth and maintain healthy levels of user growth and engagement following Facebook's Q3 earnings report. Meanwhile, HSBC analyst Nicolas Cote-Colisson initiated coverage of Facebook with a Reduce rating and $178 price target, citing his view that current consensus estimates are "overly ambitious" in the face of a "huge regulatory overhang." Goldman Sachs analyst Alexandra Walvis upgraded Nike to Buy from Neutral with a $112 price target and added the shares to her firm's Americas Conviction List, contending that Nike is on the cusp of a "sharp acceleration" in earnings growth. Citi analyst Jim Suva raised his price target for Apple to $300 from $250 after "materially" increasing his sales and earnings estimates.

Verint Systems (VRNT) announced plans to separate its Customer Engagement and Cyber Intelligence businesses into two independent publicly traded companies. Verint also reported mixed fiscal Q3 results and gave initial fiscal 2021 earnings guidance that was slightly below expectations, but the stock gained 7% following the break-up announcement.

3M (MMM) shares ended the day 1.7% lower after CFO Michael Roman presented at the Credit Suisse Industrials conference, where he said the fourth quarter "looks a lot like Q3" and pointed to some "hopefulness" around end markets. He also said he spent time in China over the last month and visited Europe and "there's still a lot of uncertainty out there."

Additionally, Biogen (BIIB) shares rose a bit over 3% following the company's presentation at the Clinical Trials on Alzheimer's Disease, or CTAD, Congress on Phase 3 top-line results for aducanumab in patients with early Alzheimer's disease.

MAJOR MOVERS: Among the noteworthy gainers was Aurinia Pharmaceuticals (AUPH), which surged 79% after disclosing its AURORA Phase 3 trial met its primary endpoint. Also higher were Signet (SIG) and Five Below (FIVE), which advanced a respective 7% and 5% after reporting quarterly results. Additionally, shares of Slack Technologies (WORK) rose 5% after the company's quarterly report last night.

Among the notable losers was Sage Therapeutics (SAGE), which dropped 60% after its Phase 3 study evaluating SAGE-217 failed to meet its primary endpoint. Also lower were At Home Group (HOME) and Elastic (ESTC), which fell 36% and 18%, respectively, after reporting quarterly results.

INDEXES: The Dow rose 28.01, or 0.10%, to 27,677.79 , the Nasdaq gained 4.03, or 0.05%, to 8,570.70 , and the S&P 500 advanced 4.67, or 0.15%, to 3,117.43 .


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Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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