Stocks are rebounding from yesterday's trade fight induced selloff, though not much new has been reported on the trade front. President Trump continues to state that he has not yet decided whether he will go through with his threat to impose tariffs on another $325B worth of Chinese imports, though it was reported that the U.S. Trade Representative filed formal paperwork on Monday evening to commence work on imposing those tariffs should the president choose to do so.
ECONOMIC EVENTS: In the U.S., import and export prices rose only 0.2% in April compared to the prior month as both came in below expectations. The NFIB's small business optimism index rose 1.7% to 103.5 in April.
TOP NEWS: Disney (DIS) announced a deal to assume full operational control of Hulu, effective immediately, as part of a broader agreement with Comcast (CMCSA), which still holds a 33% ownership interest in the streaming service venture. Under the agreement, Comcast can require Disney to buy NBCUniversal's interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value as early as January 2024. Hulu's fair market value will be assessed by independent experts, but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value of Hulu at that time of $27.5B, the companies announced.
Ralph Lauren (RL) reported better than expected sales and profits in its fiscal fourth quarter, guided for net revenue growth of 2% to 3% on a constant currency basis in FY20 and raised its quarterly cash dividend by 10%. However, shares are down 5% near noon as the company was highlighted by analysts as among the number of apparel retailers facing increased earnings risk from a protracted trade fight between the U.S. and China.
Facebook (FB) shares are little changed after Reuters reported that the company is moving toward an agreement with the U.S. government regarding its privacy policies and practices that would put the social media giant under 20 years of oversight. The deal, which would resolve an investigation on whether the company breached a similar 2011 consent pact, is not expected this week and, according to one source, the announcement of a settlement with the Federal Trade Commission could be a month away, added Reuters. Meanwhile, Facebook's WhatsApp has informed its lead regulator in the European Union, Ireland's Data Protection Commissioner, of a "serious security vulnerability" on its platform, the DPC announced.
MAJOR MOVERS: Among the noteworthy gainers was TransEnterix (TRXC), which rose 13% after BTIG analyst Sean Lavin upgraded the stock to Buy with a $3 price target, calling the 40% pullback in the shares following the Q1 miss "overdone."
Also higher was Cronos Group (CRON), which gained 7% after it entered into a multi-year supply agreement with MediPharm Labs.
Among the notable losers was Tencent Music (TME), which slid 7% after reporting quarterly results and announcing the resignation of co-president Guomin Xie.
Also lower was Solid Biosciences (SLDB), which fell 30% after the company disclosed additional safety events with the first patient treated at a new high dose in its Phase 1/2 micro-dystrophin gene therapy study in Duchenne muscular dystrophy.
INDEXES: Near midday,
the Dow was up 324.33, or 1.28%, to 25,649.32, the Nasdaq was up 117.64, or 1.54%, to 7,764.66, and the S&P 500 was up 36.09, or 1.28%, to 2,847.96.