1. — Dow Could End 8-Day Losing Streak
U.S. stock futures pointed higher on Friday, June 22, suggesting the Dow Jones Industrial Average could snap its losing streak of eight straight sessions.
Contracts tied to the Dow rose 104 points, futures for the S&P 500 gained 11.75 points and Nasdaq futures were up 21.75 points.
Global stocks recovered but investors continued to count the cost of trade war rhetoric between the United States and its biggest economic partners, and prepared for a key decision on crude oil supply from OPEC members later Friday in Vienna. Reports said Russia and Saudi Arabia, the world’s two biggest oil producers, were backing a 1 million barrel per day increase, a figure that would equate to about 1% of total global supply.
Brent crude, the global benchmark, rose 1.8% to $74.33 a barrel, while West Texas Intermediate crude oil, the U.S. benchmark, rose 1.5% to $66.54 a barrel.
The U.S. economic calendar on Friday includes the PMI Composite Flash for June at 9:45 a.m. ET.
BlackBerry Ltd. (BB) posted first-quarter adjusted profit of 3 cents a share, beating estimates by 3 cents. Revenue in the quarter fell 9.4% to $213 million.
2. — Big Banks Pass Fed’s ‘Stress Tests’
The Federal Reserve said Thursday, June 21, that the 35 biggest U.S. banks passed an annual “stress test,” where regulators check to make sure banks could withstand a deep recession and falling asset prices without collapsing.
The Fed said in a press release that the nation’s largest bank holding companies — such as JPMorgan Chase & Co. (JPM) , Bank of America Corp. (BAC) , Wells Fargo & Co. (WFC) and Citigroup Inc. (C) — would remain able to lend to households and businesses during a severe global recession.
According to the Fed, this year’s test was more severe than last year’s, featuring a severe global recession where gross domestic product plunges and the unemployment rate surges to 10%. The scenario also envisioned a “global aversion” to long-term fixed-income assets, leading to steep losses on corporate bonds, a plunge of 65% in stock prices by early 2019, and recessions that develop not just in the U.S. but in Europe, the U.K., Japan and other parts of developing Asia.
3. — Disney Is Willing to Divest More Fox Assets
Walt Disney Co. (DIS) said in a regulatory filing it was willing to divest assets of Twenty-First Century Fox Inc. (FOXA) that generated up to $1 billion in earnings before interest, tax, depreciation and amortization to get approval for the deal.
Disney said the assets it was willing to divest potentially included regional sports networks. The media giant previously planned to divest Fox assets that generated $500 million in EBITDA, according to Reuters.
Disney is locked in a battle with Comcast Corp. (CMCSA) to acquire one of the most valuable troves of content out there — the TV and entertainment assets of Fox.
4. – Tesla to Close a Dozen Solar Facilities – Report
Tesla Inc.’s ( TSLA) move last week to cut 9% of its workforce will sharply downsize the residential solar business it bought two years ago, Reuters reported, citing internal company documents and current and former Tesla solar employees.
The latest cuts to what was once SolarCity include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot Inc. (HD) that the current and former employees said generated about half of its sales.
About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations, according to Reuters.
The stock fell 0.2% in premarket trading on Friday.
5. — Conagra Makes Approach to Pinnacle Foods About a Deal
Conagra Brands Inc. ( CAG) reportedly has approached Pinnacle Foods Inc. ( PF) , the owner of the Birds Eye brand, about a potential acquisition, Bloomberg reported on Thursday.
Pinnacle finished Thursday’s session with a gain of 2.25%, bringing its market capitalization to $7.91 billion. In premarket trading on Friday, the stock rose 1.1%.
A combination of Conagra and Pinnacle would create the second-largest U.S. frozen food company, according to analysts at RBC Capital Markets.
It is at least the second time the two companies have had merger talks in as many years. Conagra approached Pinnacle about a tie-up last year, but the two parties couldn’t agree on a price and discussions were short-lived, sources told CNBC.
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