Breakfast News: Trump's Truce Tested

Breakfast News: Trump's Truce Tested

Source: Image Created by Jester AI.

1. Mixed Messages From Middle East

S&P 500 futures gave back some initial gains after Israel accused Iran of violating a ceasefire proposed by President Trump that was agreed just hours earlier, but were still up by around 0.8% after Israel's defense minister instructed an immediate response, with Iranian state media denying the accusations.

• "In light of these severe violation of the ceasefire carried out by the Iranian regime, we will respond with force": The IDF's Chief of the General Staff Eyal Zamir responded to the reports of Israel intercepting missiles launched by Iran after the agreement was in place.
• Risk sentiment wavering: Before the potential ceasefire breach, the VIX index (a common gauge of investor fear) fell over 6.5%, with WTI oil falling a further 3.6% to $66 per bbl. The losses on both assets stemmed following the latest headlines.

2. Starbucks Refutes China Claims

Dividend Investor recommendation Starbucks (SBUX -0.90%) clarified it's not currently looking for a full sale of its Chinese operations, despite media reports to the contrary, as it continues to struggle with less-expensive domestic competitors.

• "We see significant long-term potential in the market and are evaluating the best ways to capture the future growth opportunities": The business has hired its first chief growth officer in the country, with plans to pursue an aggressive marketing strategy to kick-start sales in the region.
• Same-store sales were flat last quarter, down over the previous four: Bloomberg reports investors have been approached for a possible stake sale. CEO Brian Niccol has confirmed Starbucks is open to exploring partnerships in the country.

3. Amgen Under Fire From Trial Findings

Amgen (AMGN 1.85%) fell almost 6% following results of a weight-loss trial where patients stopped taking the shot due to experiencing gastrointestinal problems, putting the Stock Advisor rec behind GLP-1 drug competitors.

• Phase 2 trial showed patients lost around 20% of body weight after a year: The overall results put the drug efficacy roughly on par with competitors such as Novo Nordisk (NVO 1.46%) and Eli Lilly (LLY 1.12%), in an area experiencing a surge in interest from both patients and investors alike.
• Data taken into account when designing Phase 3 trials: At the highest dosage, 27% of patients stopped taking the drug due to gastrointestinal problems. The business says changes in strategy have been made for the future.

4. What to Watch on Tuesday

FedEx (FDX -0.09%) will report after the closing bell, with investors keen to see if the revision lower in full-year guidance last quarter was the right move, as well as updates on the renewed partnership with Amazon (AMZN 2.18%).

• Beating revenue estimates every time for the past two years: Carnival Corp (CCL 6.91%) earnings are due out before the market opens, following record revenue last quarter. Watch for any comments around fuel costs and the impact on margins from the recent volatility.
• Watching for breadcrumbs about future monetary policy moves: U.S. Federal Reserve Chair Jerome Powell is due to testify today before the House Financial Services Committee and give an update on both inflation and the broader economy.

5. Your Take

What trend, service, or product do you think is currently in a bubble? Debate with friends and family, or become a member to hear what your fellow Fools are saying.