Dow was off 73, decliners over advancers 3-2 & NAZ fell 24. The MLP index rose fractionally to the 232s & the REIT index was a tad lower to the 401s. Junk bond funds inched higher & Treasuries rose in price. Oil fell 1 to the 55s & gold edged up 1 to 1513 (more below).
AMJ (Alerian MLP Index tracking fund)
US stocks pause after rally
Home Depot shares climbed after the retailer released a mixed earnings report that investors attributed to a weakening housing market. Q2 sales missed expectations, & the company lowered its sales outlook for the year amid fears that the trade war will slow consumer spending. But its earnings topped estimates, & that should position HD well for H2. CEO Craig Menear said the company trimmed its 2019 outlook due to “continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs.” EPS rose to $3.17, compared with $3.05 a year ago. That beat expectations for EPS of $3.08. Sales climbed 1.2% to $30.84B from $30.46B a year ago, short of expectations for $30.99B. Sales at its stores open for at least 12 months were up 3% overall & up 3.1% in the US, short of expectations for growth of 3.5%. The company previously warned about the toll a slump in lumber prices is taking on its business. Lumber futures are down roughly 16% since their highs in Feb & lumber accounts for about 8% of total sales. On the heels of the mixed results, HD is now calling for fiscal 2019 sales to be up about 2.3%, & same-store sales to be up about 4%. Previously, it was calling for total sales growth of 3.3% & same-store sales growth of 5%. It's still expecting EPS to grow by about 3.1% to $10.03 in 2019. The average shopper ticket grew 1.7% during Q2 to $67.31 from $66.20 a year earlier & sales per square foot climbed 1.1% to $509.55 from $504.20 in fiscal 2018. “We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business,” Menear said. The stock shot up 8.91 (4%).
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot stock rises on better-than-expected profits even as the company lowers outlook
US Steel (X) will temporarily lay off workers at its Great Lakes facility in Michigan in coming weeks, according to a filing the steelmaker made with the State of Michigan. In a Worker Adjustment & Retraining Notification, the company said it expects to let go fewer than 200 workers following its decision to halt production at the Michigan facility. In mid-Jun, the company said it would idle 2 blast furnaces at its Great lakes & Gary Works plants, citing lower steel prices & softening demand. US Steel said the lay-offs at the Michigan plant could last beyond 6 months. They will impact nearly every area of the facility, from blast furnace to finishing operations. The lay-offs call into question claims Pres Trump has made about the resurgence of the domestic steel industry. Last week, Trump said his 25% tariff on foreign imports has turned a “dead” business into a “thriving” enterprise. Domestic steel prices did rise in the immediate aftermath of Trump's tariffs. But they have fallen dramatically amid improved supplies and weakening demand from the auto & farm machinery sectors. Prices of hot-rolled coil are down nearly 37% from their 2018 peak. The stock inched up 4¢.
If you would like to learn more about US Steel, click on this link:
club.ino.com/trend/analysis/stock/X?a_aid=CD3289&a_bid=6ae5b6f7
US Steel plans to temporarily lay off up to 200 workers in Michigan
Gold futures edged higher, gaining some ground a day after a rally in stocks helped to prompt some selling in bullion. Gold for Dec delivery rose $2.70 (0.2%) to $1514 an ounce, after the commodity gave up 0.8% yesterday. Precious metals were gaining some altitude as bond yields edged lower, providing some impetus for metals buying. The 10-year Treasury note yield was down about 4 basis points to 1.5572%. Meanwhile, US stocks traded lower. Lower debt yields can make gold & other precious assets comparatively more attractive because metals don't carry a coupon. Gold has maintained its purchase above a psychologically important level at $1500 an ounce, which many technical analysts view as a bullish signal. Assets perceived as havens, like gold & bonds, have enjoyed a price run higher because investors have been worried that economic warnings signs point to a coming recession in the US, one that compels the Federal Reserve to further lower interest rates after a Jul 31 rate reduction.
Gold prices edge higher as bond yields slide
Stocks had a good 3 day run, but that has come to an end. Market conditions are not there for an extended rally. Once again, developments in China involving trade talks & uncertainty about Hong Kong are nagging thoughts for investors to digest.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.37 | -0.84 | -1.5% |
| GC=F | Gold | 1,517.20 | +5.60 | +0.4% |
Stocks traded to the downside, after starting the week with a rally. The markets
have rebounded over the last 3 trading sessions. on optimism that
stimulus measures would be taken not only by the Federal Reserve, but
also by Germany & China. Home Depot (HD) shares rose despite the home improvement retailer
cutting its full-year sales forecast. The home improvement retailer
pointed to a slump in lumber prices & the impact of the US-China trade war. The
Dow component cut its sales forecast to a 2.3% rise from a prior
outlook of 3.3% while it topped profit estimates. The markets rallied yesterday on the
US decision to give Chinese telecom giant Huawei another 90 days to
buy equipment from American suppliers. In Europe, the major markets traded lower by 0.3%. In
Asia, Japan's Nikkei 225 gained 0.6%, Hong Kong's Hang Seng lost
0.2% & China's Shanghai Composite was off a tad. This week will include the release of minutes from the last Fed meeting in which the central bank cut interest rates & Fed Chair Jerome Powell will address the gathering of central bankers on Fri in Jackson Hole, Wyoming.
US stocks pause after rally
Home Depot shares climbed after the retailer released a mixed earnings report that investors attributed to a weakening housing market. Q2 sales missed expectations, & the company lowered its sales outlook for the year amid fears that the trade war will slow consumer spending. But its earnings topped estimates, & that should position HD well for H2. CEO Craig Menear said the company trimmed its 2019 outlook due to “continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs.” EPS rose to $3.17, compared with $3.05 a year ago. That beat expectations for EPS of $3.08. Sales climbed 1.2% to $30.84B from $30.46B a year ago, short of expectations for $30.99B. Sales at its stores open for at least 12 months were up 3% overall & up 3.1% in the US, short of expectations for growth of 3.5%. The company previously warned about the toll a slump in lumber prices is taking on its business. Lumber futures are down roughly 16% since their highs in Feb & lumber accounts for about 8% of total sales. On the heels of the mixed results, HD is now calling for fiscal 2019 sales to be up about 2.3%, & same-store sales to be up about 4%. Previously, it was calling for total sales growth of 3.3% & same-store sales growth of 5%. It's still expecting EPS to grow by about 3.1% to $10.03 in 2019. The average shopper ticket grew 1.7% during Q2 to $67.31 from $66.20 a year earlier & sales per square foot climbed 1.1% to $509.55 from $504.20 in fiscal 2018. “We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business,” Menear said. The stock shot up 8.91 (4%).
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot stock rises on better-than-expected profits even as the company lowers outlook
US Steel (X) will temporarily lay off workers at its Great Lakes facility in Michigan in coming weeks, according to a filing the steelmaker made with the State of Michigan. In a Worker Adjustment & Retraining Notification, the company said it expects to let go fewer than 200 workers following its decision to halt production at the Michigan facility. In mid-Jun, the company said it would idle 2 blast furnaces at its Great lakes & Gary Works plants, citing lower steel prices & softening demand. US Steel said the lay-offs at the Michigan plant could last beyond 6 months. They will impact nearly every area of the facility, from blast furnace to finishing operations. The lay-offs call into question claims Pres Trump has made about the resurgence of the domestic steel industry. Last week, Trump said his 25% tariff on foreign imports has turned a “dead” business into a “thriving” enterprise. Domestic steel prices did rise in the immediate aftermath of Trump's tariffs. But they have fallen dramatically amid improved supplies and weakening demand from the auto & farm machinery sectors. Prices of hot-rolled coil are down nearly 37% from their 2018 peak. The stock inched up 4¢.
If you would like to learn more about US Steel, click on this link:
club.ino.com/trend/analysis/stock/X?a_aid=CD3289&a_bid=6ae5b6f7
US Steel plans to temporarily lay off up to 200 workers in Michigan
Gold futures edged higher, gaining some ground a day after a rally in stocks helped to prompt some selling in bullion. Gold for Dec delivery rose $2.70 (0.2%) to $1514 an ounce, after the commodity gave up 0.8% yesterday. Precious metals were gaining some altitude as bond yields edged lower, providing some impetus for metals buying. The 10-year Treasury note yield was down about 4 basis points to 1.5572%. Meanwhile, US stocks traded lower. Lower debt yields can make gold & other precious assets comparatively more attractive because metals don't carry a coupon. Gold has maintained its purchase above a psychologically important level at $1500 an ounce, which many technical analysts view as a bullish signal. Assets perceived as havens, like gold & bonds, have enjoyed a price run higher because investors have been worried that economic warnings signs point to a coming recession in the US, one that compels the Federal Reserve to further lower interest rates after a Jul 31 rate reduction.
Gold prices edge higher as bond yields slide
Stocks had a good 3 day run, but that has come to an end. Market conditions are not there for an extended rally. Once again, developments in China involving trade talks & uncertainty about Hong Kong are nagging thoughts for investors to digest.
Dow Jones Industrials
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