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Fly Intel - End of Day Brief - Tuesday June 25, 2019

Stocks end lower as Fed chair reiterates insulation from political pressure

Stocks muddled through a slow session and this type of environment may persist this week as investors await the outcome of the G20 meeting between President Trump and President Xi. Investors are still hopeful for a “ceasefire” this weekend, though a media report this afternoon indicated that a U.S. official called the goal of the sitdown a restart of trade negotiations. Fed Chairman Jerome Powell spoke today as well, though his speech at the Council on Foreign Relations was not much different than his recent post-FOMC press conference.

ECONOMIC EVENTS: In the U.S., the Case Shiller 20-city home price index rose 0.8% in April to 215.68. The FHFA home price index for April was up 0.4% to 274.7. New home sales declined 7.8% to a 626,000 pace in May, which was a big disappointment after falling 3.7% to a 679,000 pace in the month prior. The Richmond Fed manufacturing index dipped 2 points to back to 3 in June. The Conference Board's Consumer Confidence Index declined 9.8 points to 121.5 in June, which was considerably weaker than expected.

In Fed news, Federal Reserve chair Jerome Powell reiterated at the Council on Foreign Relations that the Fed is "insulated from short-term political pressures."

In trade news, Reuters reported that U.S. President Donald Trump and Chinese President Xi Jinping plan to meet at the G20 summit later this week with the goal of restarting trade negotiations.

TOP NEWS: Allergan (AGN) surged 25.4% to close at $162.43 after the drugmaker agreed to be acquired by AbbVie (ABBV) in a cash and stock deal for an equity value of roughly $63B. Upon completion of the deal, AbbVie will continue to be led by Richard Gonzalez as chairman and CEO.

Fox Business Network's Charles Gasparino reported via Twitter that T-Mobile (TMUS) and Sprint (S) executives believe "today could be the day" for the U.S. Department of Justice's antitrust division merger announcement, "but they've been saying that for days now and Dish Network's (DISH) Charlie Ergen is involved."

On the earnings front, shares of Lennar (LEN) closed 6.2% lower despite the company having reported better than expected quarterly results. On the company's associated conference call, executives called out rising cost pressures from tariffs.

Meanwhile, FedEx (FDX) shares fell 3% after Reuters reported that the company has sued the U.S. government, claiming it should not be held responsible if it accidentally shipped products that violated an export ban to some Chinese companies. Reuters later reported that UPS (UPS) said it does not intend to join its rival's lawsuit, saying it would continue to follow government directives across the areas where it operates.

Facebook (FB) was in focus after Reuters reported that the social media giant has agreed to provide identification data of French users suspected of hate speech on its social network to judges. The company said in a separate press release that it plans to offer more transparency for social and political advertisements in more countries.

MAJOR MOVERS: Among the noteworthy gainers was Pyxus (PYX), which jumped 27.1% after Imperial Capital analyst Mary Ross Gilbert initiated the stock with an Outperform rating and $71 price target. Also higher was GrubHub (GRUB), which gained 5.2% after Citi analyst Mark May upgraded the stock to Buy from Neutral and increased his price target on the shares to $91 from $75.

Among the notable losers was Aldeyra (ALDX), which slid 12.3% after reporting statistical significance was not achieved for endpoints in its SOLACE trial. Also lower was Wayfair (W), which fell 5.3% after the Boston Globe reported that some of the company's workers are planning a walkout over furniture sales to migrant detention centers at the southern U.S. border.

INDEXES: The Dow fell 179.32, or 0.67%, to 26,548.22, the Nasdaq lost 120.98, or 1.51%, to 7,884.72, and the S&P 500 declined 27.97, or 0.95%, to 2,917.38.


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