Plus, the World Bank cut its outlook for global growth for this year, iPhone shipments to China surged 18% last month, and several retailers reported a disappointing holiday sales season.
Stocks rocketed higher to start Thursday with the Dow adding 200 points, or 0.7%. The S&P 500 gained 0.6%, while the Nasdaq jumped 0.8%.
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Stocks resumed their relief rally from yesterday following both the U.S. and Iran stepping back from the precipice of war. In a speech yesterday, President Donald Trump called for taking steps toward peace. “We must all work together toward making a deal with Iran that makes the world a safer and more peaceful place,” Trump said. “We must also make a deal that allows Iran to thrive and prosper, and take advantage of its enormous untapped potential.” However, while Iran’s retaliatory missile attack from earlier in the week showed restraint, it’s not clear that the country is done taking its revenge. Iranian President Hassan Rouhani tweeted that his government’s final answer to the Gen. Qasem Soleimani “assassination will be to kick all U.S. forces out of the region.”
Spy satellite imagery suggests that the Ukraine-bound Boeing 737-800 jet that crashed in Iran on Tuesday killing all 176 people on board was shot down by Iranian missiles. Iranian officials have suggested that the plane, which crashed just minutes after takeoff, had experienced mechanical failure and there have been reports that the plane was on fire. A report from Iran released today said that the crew of the plane never made a radio call for help and were trying to turn back to the Imam Khomeini International Airport when the plane went down. “It was flying in a pretty rough neighborhood,” Trump said of the crash, which occurred soon after Iran launched its missile attacks on bases in Iraq that were housing U.S. troops. “Someone could have made a mistake.” Newsweek reported that images that began circulating on Wednesday show what look to be fragments of a Tor M-1 missile that were found in the neighborhood following the crash.
The World Bank cut its outlook for global growth for the year due to worsening prospects in China and the euro area. It expects global expansion to accelerate slightly to 2.5% in 2020, up from 2.4% last year, though the bank also warned that conditions remain fragile. “This projected recovery could be stronger if recent policy actions—particularly those that have mitigated trade tensions—lead to a sustained reduction in policy uncertainty,” World Bank economists wrote. “Nevertheless, downside risks predominate, including the possibility of a re-escalation of global trade tensions, sharp downturns in major economies, and financial disruptions in emerging market and developing economies.”
Apple shares hit an all-time high this morning following the news that iPhone shipments in China jumped more than 18% in December. According to Chinese government data, the tech giant shipped roughly 3.2 million phones in China up from 2.7 million units in December 2018. “This news only furthers our positive bullish thesis on Apple heading into 2020 given our recent positive Asia checks, 5G technology/upgrades around the corner, and our belief that China will continue this positive upward trajectory with renewed growth an share gains on the heels of an iPhone 11 product cycle which the skeptics continue to underestimate,” said Wedbush analyst Dan Ives in a note. “Many investors are asking us: Is all the good news baked into shares after an historic upward move over the last year? The answer from our vantage point is a resounding no.”
It’s a rough day for retailers. Bed Bath & Beyond shares are down more than 19% this morning following the home-goods retailer pulling its full-year guidance after Q3 results missed estimates. Loop Capital analyst Anthony Chukumba called the Q3 report “the worst we can remember since the Great Recession,” and the company’s new CEO Mark Tritton called the results “unsatisfactory.” Kohl’s shares have tanked nearly 10% after it said same-store sales during the holiday season fell 0.2% due to weakness in its core women’s apparel business, causing the retailer to reduce its full-year outlook. JCPenney shares are down 11.25% after it reported same-store sales dropped 7.5% during the holiday season, though it reaffirmed its outlook for the year. And Victoria’s Secret parent L Brands shares fell in premarket trading after it said its holiday sales shrunk, leading the retailer to cut its earnings outlook for the fourth quarter.
Stocks We’re Watching
Midatech Pharma (NASDAQ: MTP): Shares of this penny biotech stock surged as much as 103% yesterday after it announced positive results from its Study 102, confirming similar pharmacokinetics and bioavailability of octreotide for subcutaneous and intramuscular routes of administration of its MTD201 candidate. Midatech CEO Craig Cook said, “We are very pleased with the positive results of Study 102. It confirmed both the subcutaneous dosing route for MTD201, as well as the potential for extended dosing intervals. These are key advantages for patients, physicians and payors, being the first therapy to offer this, and also gives Midatech a competitive advantage versus others as we move the product through to potential approval.”
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