Global stocks extended their recent rally into the final trading day of August, a tumultuous month dominated by the trade war, amid optimism surrounding US-China trade relations, despite new impending tariffs.
Risk-assets prices had drifted higher following Beijing’s indication that it will not immediately retaliate against upcoming US tariffs, but instead remained open to communication with US officials.
However, despite the positivity amongst investors, both the US and China remain scheduled to impose new rounds of tariffs on each other’s goods on Sunday.
Wall Street’s initial reaction to China’s softened negotiation-friendly stance saw US stock prices notch their biggest one-day gain in a fortnight, yesterday.
The benchmark S&P 500 index and Dow Jones Industrial Average each closed +1.30% higher, while the Nasdaq Composite gained +1.53% and put US stocks on track for their first weekly gain since July.
Ahead, Hurricane Dorian is on course to hit the east coast of Florida over the Labor Day weekend. Investors will be watching for the storm’s impact on businesses, such as amusement parks and cruise lines.
The US stock market will be closed Monday in observance of Labor Day.
In today’s economic calendar, Friday includes; Personal Income and Outlays for July at 8:30am EST, Chicago PMI data for August at 9:45am EST, followed by Consumer Expectations and Sentiment for August at 10am EST.
In earnings; Campbell Soup (CPB), Big Lots (BIG) and JinkoSolar (JKS) are amongst the major companies scheduled to report today.
TODAY'S TOP HEADLINES
North America: Hurricane Dorian Possibly Growing to Category 4 as It Heads Toward Florida. (The WSJ)
Florida residents across the state began preparing for Hurricane Dorian as it strengthens into a potential Category 4 storm with a path that has proved difficult for forecasters to predict.
Today's Economical Announcements.
08:30AM - ★☆☆ - Personal Income (MoM) (Jul) (Previous: 0.4%)
08:30AM - ★★☆ - Personal Spending (MoM) (Jul) (Previous: 0.3%)
09:45AM - ★★☆ - Chicago PMI (Aug) (Previous: 44.4)
10:00AM - ★★☆ - Michigan Consumer Expect. (Aug) (Previous: 82.3)
10:00AM - ★★☆ - Michigan Consumer Senti. (Aug) (Previous: 92.1)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Ulta Beauty (ULTA): [EARNINGS] Missed estimates by 4 cents with quarterly earnings of $2.76 per share, with the cosmetics retailer’s revenue essentially in line. However, comparable store sales rose less than expected, and Ulta lowered its profit forecast as sales of color cosmetics slow.
American Outdoor Brands (AOBC): [EARNINGS] Reported adjusted quarterly profit of 3 cents per share, 4 cents shy of estimates, with the Smith & Wesson parent also seeing revenue fall short of Wall Street forecasts. The company also gave a weaker than expected full year forecast.
Big Lots (BIG): [EARNINGS] Beat estimates by 13 cents with adjusted quarterly profit of 53 cents per share, with revenue also above estimates. Comparable store sales rose 1.2%, shy of the 1.9% consensus estimate of analysts surveyed by Refinitiv. Big Lots also said it was confident it would be able to successfully navigate tariff-related headwinds.
Dell Technologies (DELL): [EARNINGS] Reported adjusted quarterly profit of $2.15 per share, well above the consensus estimate of $1.47. The computer maker also saw revenue beat estimates on strong sales across its computer product line. Dell also said it is successfully mitigating the impact of tariffs imposed by the U.S. and China.
Campbell Soup (CPB): [EARNINGS] Reported adjusted quarterly profit of 49 cents per share, 8 cents above estimates, with organic sales up 2%. Revenue did fall below Wall Street forecasts, but Campbell said it has built a solid foundation on which to improve its results in fiscal 2020.
Tesla (TSLA): [NEWS] Sixteen Tesla models will be exempt from China’s auto import tax, according to a government statement. Separately, Tesla raised prices for some of its vehicles in China, as the yuan drops to its lowest levels in more than a decade.
Marvell Technology (MRVL): [EARNINGS] Beat estimates by 1 cent with adjusted quarterly earnings of 16 cents per share, with the chip maker’s revenue also beating forecasts. However, Marvell gave weaker-than-expected current-quarter guidance for both revenue and profit, due to the impact of a ban on sales to China’s Huawei, as well as what the company calls a difficult macroeconomic environment.
Workday (WDAY): [EARNINGS] Reported adjusted quarterly profit of 44 cents per share, 9 cents above estimates, while the maker of human resources and financial software also saw revenue come in above forecasts. Workday saw subscription revenue jump 34% during the quarter, and gave a better-than-expected forecast for current quarter subscription revenue.
General Electric (GE): [NEWS] Won a partial dismissal of a shareholder lawsuit that had accused it of fraudulent accounting. The judge did give shareholders permission to amend their complaint.
Walt Disney (DIS): [NEWS] Sold its 80% stake in the YES Network to an investor group that includes the New York Yankees, Amazon.com and Sinclair Broadcast Group.
Groupon (GRPN): [NEWS] Is being targeted by activist investors, according to the Wall Street Journal. The paper said those investors are hoping to persuade management to buy back stock, enter a strategic partnership, or sell the company.
GAINERS: BURL, DG, RMBS, CAL
DECLINERS: OLLI, ANF, HRB, BBY, WSM, APU
WE WILL SHOW YOU THE WAY!