On Monday markets took a pause from last week’s strong run-up as reports showed China’s exports to the U.S. fell 23% in November, and 1.1% overall. Ten year Treasuries yielded 1.83% and West Texas Intermediate crude fell slightly to $58.97 a barrel.
On Tuesday the second estimate of third quarter non-farm productivity was -.2% and unit labor costs rose 2.5%. Trade talks continued to weigh on investors as the December 15th deadline looms when increased tariffs against China will take effect. However, the U.S., Canada, and Mexico moved towards a new trade deal that has the support of the Trump administration and Democratic lawmakers.
On Wednesday the consumer price index for November rose .3% and the EIA petroleum status report for the week ending December 6th saw crude oil inventory rising 800,000 barrels. The Federal Reserve concluded their two day meeting and didn’t change interest rates. Of particular interest to investors was that the Fed doesn’t expect to change rates throughout 2020 and Fed Chair Jerome Powell said that he would have to see inflation move upward persistently and significantly before raising rates. Markets rose modestly on the news.
On Thursday jobless claims for the week ending December 7th rose 49,000 to 252,000, much higher than expected while the producer price index for November remained unchanged compared to a .4% increase the prior month. President Trump tweeted that the U.S. was very close to a big deal with China, and various news reports surfaced that U.S. negotiators offered to cut existing tariffs by up to 50% as well as cancel new tariffs set to take effect on Sunday. Markets rallied strongly on the news with the Dow Industrials closing 220 points higher, and the Nasdaq Composite and S&P 500 closing at record highs. Ten year Treasuries rose 10 basis points to yield 1.89%.
On Friday retail sales for November rose .2%, lower than expected and import prices for November rose .2% while export prices also rose .2%. China and the U.S. confirmed they have reached agreement on the terms of a phase one trade deal, however, markets didn’t move much at the open. Now let’s take a look at some stocks.
Stitch Fix, Inc. (NASDAQ: SFIX) reported its first quarter results after the closing bell on Monday. The company reported better-than-expected earnings and revenue, which sent shares higher by 10% on Tuesday morning. For the quarter, Stitch Fix reported flat earnings on revenue of $445 million, with revenue gaining 21% year-over-year, primarily driven by the growth of its active client base.
The Children’s Place, Inc. (NASDAQ: PLCE) reported its third quarter results before the opening bell on Wednesday. The company’s shares plummeted by 20% after reporting a weaker-than-expected fourth quarter guidance. For the third quarter, The Children’s Place came in with earnings of $3.03 per share on revenue of almost $525 million. The company beat expectations for both top and bottom line.
Lululemon Athletica Inc. (NASDAQ: LULU) reported its third quarter results after the closing bell on Wednesday, with earnings of $0.96 per share on revenue of $916 million. Results were better-than-expected, however, guidance was weaker-than-expected for the fourth quarter and shares slipped by 5% on Thursday morning.
Ciena Corporation (NYSE: CIEN) reported its fourth quarter results during Thursday’s pre-market hours. The company missed earnings expectations, which sent shares lower during pre-market hours, however, shares recovered and traded 15% higher by mid-day. For the quarter, Ciena reported earnings of $0.58 per share on revenue of $968 million.
Adobe Inc. (NASDAQ: ADBE) reported its fourth quarter results after the closing bell on Thursday. The Company surpassed analysts’ earnings and revenue estimates, sending shares higher by over 3% shortly after reporting. Adobe reported earnings of $2.29 per share on record quarterly revenue of almost $3 billion. Analysts anticipated earnings of $2.26 per share.