On Monday there wasn’t much economic news as investors waited for the outcome of the Federal Reserve meeting later in the week.
On Tuesday personal income for June rose .4%, consumer spending rose .3%, and the PCE price index rose .1%. The Case-Shiller home price index for May rose .1% and consumer confidence for July jumped 11.4 points to 135.7 on the strength of the job market. The pending home sales index for June rose an unexpectedly strong 2.8% and President Trump tweeted his disappointment with China’s failure to purchase more U.S. agricultural products, saying the country doesn’t come through.
On Wednesday the ADP employment report for July came in at 156,000 and the employment cost index for the 2nd quarter remained tame, increasing .6%. The EIA petroleum status report for the week ending July 26th saw crude oil inventory drop 8.5 million barrels. The Federal Reserve concluded their two day meeting and, as expected, by a vote of 8 to 2, cut the Fed Funds rate by 25 basis points to a range of 2.00% to 2.25%. However, when Fed Chair Jerome Powell gave a press conference he described the cut as a “mid-cycle policy adjustment”, as opposed to a long series of rate cuts. Investors weren’t pleased with that and markets promptly sold off heavily.
On Thursday the ISM manufacturing index for July fell .5 point to 51.2 and construction spending for June declined 1.3%. Markets surged until President Trump announced that the U.S. will impose 10% tariffs on an additional $300 billion of Chinese goods starting September 1st. The Dow Industrials closed down 280 points and ten year Treasuries’ yield fell 12 basis points to 1.89%. U.S. crude fell 7.9% to $53.95 a barrel and gold rose 1.2% to $1,454 an ounce.
On Friday nonfarm payrolls for July came in at 164,000 and the unemployment rate remained unchanged at 3.7%. Average hourly earnings rose .3%. Markets opened sharply lower over continued anxiety over the U.S.-China trade situation. Now let’s take a look at some stocks.
Beyond Meat, Inc. (NASDAQ: BYND) reported its second-quarter results after the closing bell on Monday. The plant-based simulated meat producer had weaker-than-expected earnings, causing shares to tank by over 15% during extended trading hours. Beyond Meat reported an loss of $0.24 per share on revenues of $67 million, however, the company also said its revenue surged 287% year-over-year. Also hurting share prices was the announcement of plans to offer additional shares for sale.
Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its second quarter results on Tuesday after the market close, coming in with earnings of $.08 per share on revenue of $1.5 billion. However, shares fell 10% on news that revenue dropped 13% year-over-year, primarily caused by a decline in its Computing and Graphics segment. For the next quarter AMD expects revenue to rebound, increasing 9% year-over year.
Apple, Inc. (NASDAQ: AAPL) reported its third-quarter results after the closing bell on Tuesday. The tech giant surpassed analysts’ estimates and provided stronger-than-expected guidance, sending shares 5.6% higher at the open on Wednesday. Apple reported earnings of $2.18 per share on revenues of almost $54 billion. Slowing iPhone sales were offset by growth in the company’s Wearables, Home, Accessories and Services segments. Apple also declared a cash dividend of $0.77 per share.
Shopify Inc. (NYSE: SHOP) reported its second-quarter financial results before the opening bell on Thursday, with earnings of $.14 per share on revenue of $362 million. The online e-commerce platform surpassed analysts’ earnings and revenue estimates, sending shares 10% higher during midday Thursday. During the quarter, Shopify reported that revenues rose by 48% year-over-year as the company saw strength in its subscription solutions.
Square, Inc. (NYSE: SQ) reported its second-quarter financial results after the closing bell on Thursday with adjusted earnings of $.21 per share on adjusted revenue of $563 million. Despite topping analysts’ estimates, shares tumbled as much as 8% on disappointing guidance. Square also decided to sell its food-delivery service Caviar to DoorDash for $410 million.