U.S. equities finished the first trading day of the week nearly where they began in the continued search for any sort of catalyst to move in one direction or the other amid sustained low volatility. The markets shrugged off the results to the highly-anticipated French Presidential election, softer-than-expected Chinese trade data and some large M&A deals. Meanwhile, Treasury yields were higher, while gold, crude oil prices and the U.S. dollar were little changed.
The Dow Jones Industrial Average (DJIA) rose 5 points to 21,012, the S&P 500 Index was unchanged at 2,399, and the NASDAQ Composite edged 2 points higher to 6,103. In moderate volume, 836 million shares were traded on the NYSE and 1.9 billion shares changed hands on the NASDAQ. WTI crude oil inched $0.21 higher to $46.43 per barrel and wholesale gasoline increased $0.02 to $1.52 per gallon. Elsewhere, the Bloomberg gold spot price ticked $0.24 lower to $1,227.77 per ounce, and the dollar index, a comparison of the U.S. dollar to six major world currencies, was flat at 99.09.
Tyson Foods Inc. (NYSE:TSN $60) reported fiscal Q2 earnings-per-share (EPS) of $0.92, or $1.01 ex-items, versus the $1.02 FactSet estimate, as revenues declined 0.9% year-over-year (y/y) to $9.1 billion, roughly in line with forecasts. TSN reaffirmed its full-year profit outlook. Shares were solidly lower.
Coach Inc. (NYSE:COH $45) announced an agreement to acquire Kate Spade & Co (NYSE:KATE $18) for $18.50 per share in cash for a total transaction value of $2.4 billion. COH said the deal is expected to be accretive in earnings in fiscal 2018 and reach double-digit accretion by fiscal 2019. Shares of both companies were nicely higher.
Newell Brands Inc (NYSE:NWL $52) posted Q1 EPS of $1.31, or $0.34 ex-items, versus the expected $0.29, as core sales—excluding acquisitions and divestitures—grew 2.5% y/y and total revenues came in at $3.3 billion, topping the forecasted $3.2 billion. The consumer goods company raised its full-year earnings outlook and reaffirmed its revenue guidance. NWL rallied over 10%.
Sysco Corp. (NYSE:SYY $55) reported fiscal Q3 EPS of $0.44, or $0.50 excluding the impact of its Brakes Group acquisition, compared to the expected $0.51, as revenues excluding the Brakes acquisition rose 2.3% y/y to $12.3 billion, but may be incomparable to the forecasted $13.1 billion. Shares finished lower.
Comcast Corp. (NASDAQ:CMCSA $39) and Charter Communications Inc. (NASDAQ:CHTR $323) announced an agreement for a wireless partnership. CMCSA was little changed, while CHTR was lower.
Sinclair Broadcast Group Inc (NASDAQ:SBGI $36) announced an agreement to acquire Tribune Media Co (NYSE:TRCO $42) for $43.50 per share in cash and stock, or about $3.9 billion, plus the assumption of approximately $2.7 billion in debt. SBGI was lower, while TRCO gained ground.
Consumer comes into focus this week
Treasuries fell amid a U.S. economic calendar that was void of any major releases today. The yield on the 2-Year note gained 2 basis points (bps) to 1.33%, while the yield on the 10-Year note rose 3 bps to 2.38%, and the 30-Year bond rate advanced 4 bps to 3.02%.
With earnings season well past the apex, the economic front will likely garner more attention this week, delivering April inflations readings such as the Import Price Index, Producer Price Index (PPI) and Consumer Price Index (CPI). However, the focus this week will likely be on the all-important U.S. consumer, courtesy of the releases of April retail sales and the preliminary May University of Michigan Consumer Sentiment Index.
However, the domestic economic calendar will get moving tomorrow with the release of the National Federation of Independent Business (NFIB) Small Business Optimism Index, forecasted to tick lower during April to a level of 104.0 from March's 104.7 level, followed by the Job Openings and Labor Turnover Survey (JOLTS), with economists expecting the measure of unmet demand for labor to show 5.74 million jobs were available to be filled in March, matching the prior month's reading.
Finally, the political front remains in focus in the wake of last week's passage in the House of an Affordable Care Act replacement bill, which now faces the Senate.
Europe mostly lower following French election results, Asia mostly higher to begin week
European equities finished mostly lower, with the markets reacting to the expected results from the final round of the French Presidential election over the weekend that delivered a victory for pro-Europe, mainstream candidate Emmanuel Macron over anti-EU Marine Le Pen. However, political uncertainty remained as U.K. Brexit negotiations continue and a vote looms in June for the nation, while Germany is slated to hold an election later this year, along with Italy.
Oil and gas issues rebounded, despite choppy action for crude oil prices, while basic materials issues led to the downside following some relatively soft Chinese trade data. The markets shrugged off upbeat reports on German factory orders and eurozone consumer sentiment. The euro and British pound traded lower versus the U.S. dollar, while bond yields in the region were mixed.
Stocks in Asia finished higher to kick off the week, aided by Friday's stronger-than-expected U.S. labor report and final French Presidential election vote that offered no surprise to keep concerns cooled about the status of the eurozone. Basic materials and oil and gas issues rebounded from recent pressure, despite some softer-than-expected Chinese trade data. Stocks in both Japan and South Korea rallied in their return to action following holiday breaks, with continued weakness in the yen giving the former an additional push.
Meanwhile, markets in China were mixed amid lingering concerns about regulatory crackdowns and following trade figures showing April exports and imports rose at smaller-than-expected y/y rates. Shares in mainland China declined and those trading in Hong Kong advanced. The strength in commodity issues gave Australia's markets a boost, while Indian equities posted a modest increase.
Tomorrow's international economic calendar will hold business confidence and retail sales from Australia, industrial production and trade data from Germany, and retail sales from Italy.