Here are five things you must know for Friday, Nov. 15:
1. — Stock Futures Rise as U.S.-China Trade Pact ‘Getting Close’
U.S. stock futures rose Friday, suggesting Wall Street could test another series of fresh record highs following bullish comments on U.S.-China trade talks from a key White House adviser.
Donald Trump’s most influential economic adviser, Larry Kudlow, told an event at the Council on Foreign Relations in Washington Thursday that the world’s two largest economies have made “very good progress” amid “constructive talks” aimed at ending their trade dispute of 16 months.
“We’re getting close,” Kudlow said. “The mood music is pretty good, and that has not always been so in these things.”
The U.S. and China have held working-level video conferences in recent days focused on issues ranging from Chinese purchases of U.S. agricultural goods to commitments to curtail theft of intellectual property that Trump is demanding from China, according to Bloomberg, which cited people familiar with the discussions.
Contracts tied to the Dow Jones Industrial Average rose 59 points, futures for the S&P 500 were up 6.35 points, and Nasdaq futures gained 24 points.
The S&P 500 closed at a record high for a second straight session on Thursday.
The economic calendar in the U.S. Friday includes Retail Sales for October at 8:30 a.m. ET, the Empire State Manufacturing Survey for November at 8:30 a.m., Import and Export Prices for October at 8:30 a.m. and Industrial Production for October at 9:15 a.m.
2. — Nvidia Posts Third-Quarter Earnings Beat but Issues a Weak Revenue Forecast
Nvidia (NVDA – Get Report) rose 0.48% in premarket trading to $210.80 after the gaming chipmaker reported third-quarter earnings that topped analysts’ estimates but issued weak guidance for the fourth quarter.
Nvidia reported third-quarter earnings of $1.78 a share on revenue of $3.01 billion. Analysts were expecting the company to report earnings of $1.58 a share on revenue of $2.92 billion. Data center revenue was $726 million, down 8% from a year earlier and below expectations of $754 million.
The company said it expects fourth-quarter revenue of about $2.95 billion vs. expectations of $3.06 billion. Gross margins were forecast at about 64.5% compared with year-earlier gross margins of 64.1%.
“Our gaming business and demand from hyperscale customers powered Q3’s results,” said CEO Jensen Huang in a press release. “The realism of computer graphics is taking a giant leap forward with NVIDIA RTX.”
The company said that it expects “strong data center growth ahead” which will be driven by “the rise of conversational AI and inference.”
“All in, despite the small miss in data center and automotive, we believe the release to be exactly what the market was looking for as the increase in ray-tracing compatible game releases continues to support RTX adoption and visibility on data center spend continues to improve,” said Jim Cramer and the Action Alerts PLUS team, which holds Nvidia in its portfolio.
3. — Amazon Challenges Pentagon’s $10 Billion Cloud Contract Award to Microsoft
In a statement, a spokesman for Amazon Web Services said “numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias — and it’s important that these matters be examined and rectified.”
U.S. Defense Secretary Mark Esper said Friday he was certain that the award of the contract to Microsoft instead of Amazon was done fairly.
Esper recused himself from the contract decision because his son had worked for one of the other unsuccessful bidders.
“I am confident that it was conducted freely and fairly without any type of outside influence,” Esper said at a news conference in Seoul, South Korea, the Associated Press reported.
Amazon dominates the cloud computing space with about 33% of the business, while Microsoft trails with about 16%.
Donald Trump called for a review of the contract process last summer as incoming Esper took office. At the time, many pundits were expecting Amazon to win the deal.
Trump has famously feuded with Amazon CEO Jeff Bezos, who owns the Washington Post newspaper. At the time of the review, Trump said he’d received multiple complaints from other companies about the bidding process.
4. — Antitrust Probe of Google Expands to Search and Android
50 state attorneys general, who represent 48 U.S. states, Puerto Rico and Washington D.C., are preparing subpoenas that will focus on Google search and its Android platform, in addition to its advertising business, according to CNBC.
The investigation was formally announced in September by Texas Attorney General Ken Paxton. The investigation so far has focused just on Google’s advertising business.
Alphabet will cooperate with the antitrust investigations, according to a statement by Kent Walker, Google’s senior vice president of global affairs. Google also faces a Department of Justice review of its business practices.
5. — Warren Buffett’s Berkshire Hathaway Reveals Stakes in RH, Occidental Petroleum
Warren Buffett’s Berkshire Hathaway (BRK.A – Get Report) launched new positions in RH (RH – Get Report) , the company formerly known as Restoration Hardware, and Occidental Petroleum (OXY – Get Report) , according to a filing with the Securities and Exchange Commission.
Berkshire’s 13-F filing, which reported the company’s shareholdings as of the end of September, revealed a stake of 1.2 million shares in RH and a stake of 7.4 million shares in Occidental.
RH was rising 6.76% to $187.06 in premarket trading Friday. Occidental Petroleum shares rose 1.93% to $38.49.