On Monday, markets took a hit as the U.S.- China trade dispute, Hong Kong protests, and economic worries all combined to drag the Dow Industrials down 391 points and the Nasdaq Composite down 1.2%. Amidst the uncertainty investors bought bonds with the yield on 10-year Treasuries falling 10 basis points to 1.65%, its lowest level since 2016, and gold rose 1% to 1,524 an ounce.
On Tuesday the NFIB small business optimism index for July rose 1.4 points to 104.7, and the consumer price index for July rose .3% on top of the prior month’s .1% gain. The U.S. announced that certain products will not face the additional 10% tariffs levied against China, and other tariffs will be delayed until December 15th. On the news, markets surged with the Dow Industrials closing up 372 points.
On Wednesday import prices for July rose .2% and export prices also rose .2%. The EIA petroleum status report for the week ending August 9th saw crude oil inventory rise 2.4 million barrels. Global economic concerns intensified as Germany’s GDP contracted in the second quarter, and China’s industrial production in July was lower than expected. Also of concern was a brief inversion of the 10-year Treasury yield curve with the 2 year rate, a historical predictor of recessions. Markets tanked with the Dow Industrial closing 800 points lower and the Nasdaq Composite losing a little over 3%.
On Thursday jobless claims for the week ending August 10th rose 9,000 to 220,000, and retail sales for July rose .7%, much higher than expectations. Nonfarm productivity for the 2nd quarter rose 2.3% and unit labor costs rose 2.4% while industrial production for July declined .2%. The strength in retail sales soothed investors, as well as better than expected earnings from Walmart and markets rose modestly. Ten year Treasuries’ yield fell to 1.51% and the 30 year Treasury fell below 2% for the first time in history.
On Friday housing starts for July fell 4% to an annualized 1.191 million units and markets opened sharply higher as yields on bonds rose. Now let’s take a look at some stocks.
JD.com, Inc. (NASDAQ: JD) reported its second quarter results with earnings of RMB 2.30 per share on revenue of RMB 150 billion. Annual active accounts increased to 321.3 million compared to 310.5 million a year ago. JD greatly exceeded analysts’ expectations, with net incoming surging by 644% to RMB 619 million. Shares were up over 6% on the news.
Macy’s, Inc. (NYSE: M) reported its second quarter results missing analysts’ earnings estimates, causing shares to plunge by as much as 17%. The company reported earnings of $0.28 per share on revenue of $5.5 billion, noting the poor performance was caused by rising inventory due to lack of demand in women’s sportswear, and a decline in international tourism. The company also lowered its guidance for the remainder of the year.
Alibaba Group Holding Limited (NYSE: BABA) reported its first quarter results before the opening bell on Thursday. The Chinese e-commerce giant reported better-than-expected results, driven by an increase in annual active consumers and its cloud computing segment, sending shares 5% higher during pre-market hours. Alibaba reported earnings of RMB 12.55 per share on revenue of RMB 115 billion, and saw its revenues surge by 42% year-over-year. The company’s cloud computing segment saw its revenue grow 66% year-over-year.
Walmart Inc. (NYSE: WMT) reported its second quarter results on Thursday morning, topping analysts’ estimates and sending shares 5% higher. The retailer reported earnings of $1.27 per share on revenue of $130 billion. The strong quarter was driven by Walmart’s increase in U.S. comparable store sales of 7.3%, while eCommerce sales grew by 37% year-over-year. International sales, however, slipped by 1.1% to 29 billion.
Nvidia Corporation (NASDAQ: NVDA) reported its second quarter results during extended trading hours on Thursday coming in with earnings of $1.24 per share on revenue of $2.6 billion, higher than expectations. Despite the good news, Nvidia’s revenue declined 17% year-over-year and net income decreased by 37%. Shares gained 6% on the news.