Stocks open at record highs, Morgan Stanley shares surge

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Domestic stocks marched higher Thursday amid lingering optimism after the U.S. signed a preliminary trade deal with China.

10:50 a.m. Q4 data ‘pretty good’ but downside risk to growth: JPMorgan

This weeks’ batch of retail, jobless and manufacturing data looked “pretty good” according to JPMorgan Chase’s Michael Feroli, but with a caveat or two:

 We now see some downside risk to our 2.0% GDP call for Q4. After two very strong quarters, it looks like the consumer took a bit of a breather last quarter. That said, the consumer fundamentals appear to remain solid. In particular, the labor market continues to look healthy and that was validated in this morning’s jobless claims number.

10:09 a.m. ET: Tesla stock falls after Morgan Stanley downgrade

Shares of Tesla (TSLA) paced toward a second straight session of declines after Morgan Stanley delivered a bearish rating on the stock. Shares fell 3.6% to below $500 each during intraday trading.

Analyst Adam Jonas cut his rating on Tesla to Underweight, or analogous to a Sell rating, from Equal-weight in a new note. However, he also raised his price target to $360 from $250 as a result of the stock’s recent appreciation. Shares of Tesla have more than doubled since delivering third-quarter results in October, which included a surprise profit.

By Jonas’s measure, Tesla already has optimism around its new business in China priced into the stock. He suggested there would be more attractive entry points to owning the stock in the future.

The call added to bearish sentiment after a report Wednesday showed the car-maker’s overall vehicle registrations almost halved in California during the fourth-quarter.

9:34 a.m. ET: S&P 500, Dow, Nasdaq hit all-time highs

All three major indices climbed to record highs Thursday around the market open, buoyed by optimism after the U.S. inked a trade deal with China and earnings for major companies including Morgan Stanley (MS) topped expectations.

Within the Dow, Microsoft (MSFT), American Express (AXP) and Visa (V) also each hit all-time highs Thursday.

Here were the main moves in markets, as of 9:36 a.m. ET:

  • S&P 500 (^GSPC): +0.54% or +17.6 points to 3,306.89

  • Dow (^DJI): +0.55% or +160.56 points to 29,190.78

  • Nasdaq (^IXIC): +0.61% or +56.79 points to 9,315.75

  • Crude oil (CL=F): +0.59% or +$0.34 to $58.15 a barrel

  • Gold (GC=F): -0.02% or -$0.30 to $1,553.70 per ounce

8:30 a.m. ET: Retail sales rise 0.3% in December, matching expectations

Headline retail sales rose by an expected 0.3% in December, according to the Commerce Department’s advance monthly report. This matched November’s upwardly revised pace.

Headline retail sales were weighed down by weak automobile sales, which fell 1.3% from November. Excluding auto sales, retail sales rose 0.7%, greater than the 0.5% rise expected, according to Bloomberg-compiled consensus data. Excluding auto and gas sales, retail sales rose 0.5% after a 0.2% decline in November.

8:30 a.m. ET: Initial unemployment claims claims unexpectedly fall for week ended January 11

In another sign of strength in the labor market, weekly new unemployment claims unexpectedly declined during the week ended January 11, the Department of Labor said Thursday.

Initial unemployment claims fell by 10,000 to a seasonally adjusted 204,000 for the week ended January 11. Consensus economists had expected weekly unemployment claims to rise to 218,000, according to Bloomberg consensus data.

Continuing unemployment claims also declined for prior week, albeit by a less than expected amount. Continuing jobless claims fell to a seasonally adjusted 1.767 million for the week ended January 4, from a slightly upwardly adjusted 1.804 million the prior week.

7:47 a.m. ET: Morgan Stanley stock climbs after earnings beat

Morgan Stanley (MS) handily topped consensus expectations on nearly every major metric in the fourth quarter, bringing its full-year revenues and net income to all-time highs.

The bank delivered adjusted earnings of $1.20 a share on net revenue of $10.86 billion, versus consensus estimates for adjusted earnings of 73 cents a share on net revenue of $9.73 billion.

As with other major financial institutions reporting this week, Morgan Stanley’s bond-trading revenue came in well ahead of expectations as fixed-income trading picked up across Wall Street at the end of 2019 versus 2018. And net interest income, a closely watched metric that captures customer loan payments less the amount companies pay depositors, also topped expectations at $1.43 billion, versus the $1.02 billion anticipated.

Shares of Morgan Stanley rose 2.02% to $54.00 each as of 7:47 a.m. ET.

7:31 a.m. ET: S&P 500 on track to open at record high

Stock futures rallied Thursday morning, building on records from a day earlier after the signing of a phase one U.S.-China trade deal. The S&P 500 was poised to open at a record high.

On Thursday, traders digested earnings results from companies including Morgan Stanley (MS) and Taiwan Semiconductor Manufacturer (TMS) and awaited the Commerce Department’s report on December retail sales due at 8:30 a.m. ET.

Here were the main moves during the pre-market session, as of 7:29 a.m. ET:

  • S&P futures (ES=F): 3,305, up 11.25 points or 0.34%

  • Dow futures (YM=F): 29,112, up 83 points or 0.29%

  • Nasdaq futures (NQ=F): 9,100.00, up 40 points or 0.44%

  • Crude oil (CL=F): $57.59 per barrel, down $0.22 or 0.38%

  • Gold (GC=F): $1,555.90 per ounce, up $1.90 or 0.12%

A trader works on the floor at the closing bell of the New York Stock Exchange (NYSE) in New York, U.S., December 30, 2019. REUTERS/Bryan R Smith

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2020-01-16 15:11:00

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