Dow dropped 140, decliners over advancers 3-2 & NAZ fell 11. The MLP index lost 1+ to the 215s & the REIT index pulled back 1+ to the 412s. Junk bond funds declined in price & Treasuries had a strong rally as stocks were being sold. Oil fell 1 to 54 & gold rose 16 to 1513 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Starbucks (SBUX) reported quarterly revenue that topped expectations as cafes in the US & China attracted more customers. “Our U.S. business delivered 6% comparable store sales growth in the fourth quarter, while China grew comparable store sales by 5% and total transactions by 13%,” CEO Kevin Johnson said. The coffee chain reported fiscal Q4 EPS of 67¢, up from 56¢ a year earlier. Excluding the sale of the Tazo brand, Nestle-related transaction costs & other items, EPS was 70¢, in line with estimates. Net sales rose 7% to $6.75B, topping expectations of $6.68B. The company reported global same-store sales growth of 5% vs 4% expected. Both the US & China, its 2 biggest markets, reported strong same-store sales & increasing traffic. In the US, sales at stores open at least a year increased by 6%, driven by its cold drinks. During the qutr, SBUX introduced its first new pumpkin coffee drink since the pumpkin spice latte: the pumpkin cream cold brew. US cafes also grew traffic during all times of the day, for the 2nd consecutive qtr. Execs attributed US sales growth to investments in its employees, like better benefits & more hours, which in turn leads to higher customer satisfaction scores. After revamping its loyalty program last qtr, the company counts 17.6M active rewards members in the US. Johnson said that customers spend more when they join the loyalty program. In China, despite growing competition from Luckin Coffee & concern about an economic slowdown, SBUX saw same-store sales growth of 5%, as more customers bought its products and spent more. The coffee chain opened more than 600 net new cafes in China during fiscal 2019 & now has more than 4K locations across the country. Those new locations include a smaller format cafe with limited seating in Beijing, similar to those developed by Luckin. SBUX also introduced its fiscal 2020 outlook. It expects to add 2K net new Starbucks locations worldwide, with continued expansion in the US & China. It expects revenue growth of 6-8% & global same-store sales growth of 3-4%. “Our strong performance throughout fiscal 2019 gives us confidence in a robust operating outlook for fiscal 2020,” Johnson said. The company will spend $1.8B on capital expenditures. It expects fiscal 2020 adjusted, or non-GAAP, EPS of $3.00-3.05. Analysts were expecting the coffee chain to report fiscal 2020 EPS of $3.08. CFO Pat Grismer said in Sep that one-time tax benefits realized in fiscal 2019 would be a headwind & that SBUX bought back $2B worth of shares earlier than originally planned. The stockwent up 37¢.
If you would like to learn more about SBUX, click on this link:
club.ino.com/trend/analysis/stock/SBUX?a_aid=CD3289&a_bid=6ae5b6f7
Starbucks’ stock jumps on strong US and China sales growth
Pres Trump said China & the US are in the process of selecting a new site to sign what he has called phase one of a broader trade agreement between the 2 countries. Trump had hoped to ink the deal during a Nov summit of nations from the Asia-Pacific Economic Cooperation group in Chile. But Chilean President Sebastian Piñera announced yesterday that the meeting had been canceled amid widening protests in the capital city of Santiago.
Households increased spending headed into the 4th qtr, suggesting consumers have continued to help prop up US economic growth. Personal-consumption expenditures (household spending) rose a seasonally adjusted 0.2% in Sep from Aug, the Commerce Dept reported. Outlays rose at a similar pace in Aug after growing more briskly in H1-2019.
Chinese Pres Xi Jinping emerged from a Communist Party conclave with a resolute endorsement of his leadership, despite a slowing economy, a bruising trade war with the US & unrest in Hong Kong. The party's governing Central Committee also signaled a firmer stance on Hong Kong, calling for stronger safeguards for China’s national security in the city—a formulation that some experts say foreshadows new legal powers to squelch dissent against Beijing’s authority.
Gold futures climbed above the key $1500 level to mark their highest settlement in 5 weeks, finding haven-related support from weakness in the US stock market & the $. A news report that said China officials have doubts over prospects for a long-term trade deal with the US fed declines in US stocks & haven demand for gold. Gold for Dec rose $18 (1.2%) to settle at $1514 an ounce. That was the highest most-active contract finish since Sep 26 & largest one-day $ & percentage climb since Oct 2. Chinese officials are expressing doubts about their ability to reach a comprehensive, long-term trade deal with the US despite progress toward signing a “phase one” agreement. A report said Chinese officials have concerns about Pres Trump's impulsive nature & fear he could even back out of the limited deal that both Beijing & DC have signaled they want to sign in coming weeks.
Gold climbs back above $1,500 to settle at a 5-week high
Oil futures declined to settle at their lowest in over a week, with US prices down a 4th session in a row but holding on to a modest gain for the month. Worries about the global economic backdrop were back in focus for oil traders, with prices declining after a round of lackluster factory data out of China & a news report that said Chinese officials have doubts over prospects for a long-term trade deal with the US. West Texas Intermediate crude for Dec fell 88¢ (1.6%) to settle at $54.18 a barrel. Prices fell a 4th straight session and marked their lowest finish since Oct 22. For the month, prices rose 0.2%. Global benchmark Dec Brent crude declined 38¢ (0.6%) to end at $60.23 a barrel, also the lowest since Oct 22. The contract, which expired at the day's settlement, posted a gain of 0.9% for the month. Jan Brent crude, which became the front month, lost 62¢ (1%) at $59.62 a barrel. China’'s official gauge of factory activity, the manufacturing purchasing managers index, fell to an 8 month low of 49.3 in Oct from 49.8 in Sep, the National Bureau of Statistics said. A reading of less than 50 for the survey-based index indicates a contraction in activity. The downbeat economic worries raised concerns over a slowdown in energy demand. Oil futures settled lower on Wed after the Energy Information Administration reported a larger-than-expected increase in US crude inventories.
Oil prices fall to lowest finish in over a week, but cling to a modest monthly climb
After a rough start, the Dow finished the month with a gain of 130. Not bad in a month that has seen some of worst daily declines in history. The status of the US-China trade deal is on hold. Traders are looking for the gov to find a substitute location for the 2 sides to meet & sign a deal (phase I). Until there is clarity, the bears will be in charge of the stock market.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Starbucks (SBUX) reported quarterly revenue that topped expectations as cafes in the US & China attracted more customers. “Our U.S. business delivered 6% comparable store sales growth in the fourth quarter, while China grew comparable store sales by 5% and total transactions by 13%,” CEO Kevin Johnson said. The coffee chain reported fiscal Q4 EPS of 67¢, up from 56¢ a year earlier. Excluding the sale of the Tazo brand, Nestle-related transaction costs & other items, EPS was 70¢, in line with estimates. Net sales rose 7% to $6.75B, topping expectations of $6.68B. The company reported global same-store sales growth of 5% vs 4% expected. Both the US & China, its 2 biggest markets, reported strong same-store sales & increasing traffic. In the US, sales at stores open at least a year increased by 6%, driven by its cold drinks. During the qutr, SBUX introduced its first new pumpkin coffee drink since the pumpkin spice latte: the pumpkin cream cold brew. US cafes also grew traffic during all times of the day, for the 2nd consecutive qtr. Execs attributed US sales growth to investments in its employees, like better benefits & more hours, which in turn leads to higher customer satisfaction scores. After revamping its loyalty program last qtr, the company counts 17.6M active rewards members in the US. Johnson said that customers spend more when they join the loyalty program. In China, despite growing competition from Luckin Coffee & concern about an economic slowdown, SBUX saw same-store sales growth of 5%, as more customers bought its products and spent more. The coffee chain opened more than 600 net new cafes in China during fiscal 2019 & now has more than 4K locations across the country. Those new locations include a smaller format cafe with limited seating in Beijing, similar to those developed by Luckin. SBUX also introduced its fiscal 2020 outlook. It expects to add 2K net new Starbucks locations worldwide, with continued expansion in the US & China. It expects revenue growth of 6-8% & global same-store sales growth of 3-4%. “Our strong performance throughout fiscal 2019 gives us confidence in a robust operating outlook for fiscal 2020,” Johnson said. The company will spend $1.8B on capital expenditures. It expects fiscal 2020 adjusted, or non-GAAP, EPS of $3.00-3.05. Analysts were expecting the coffee chain to report fiscal 2020 EPS of $3.08. CFO Pat Grismer said in Sep that one-time tax benefits realized in fiscal 2019 would be a headwind & that SBUX bought back $2B worth of shares earlier than originally planned. The stockwent up 37¢.
If you would like to learn more about SBUX, click on this link:
club.ino.com/trend/analysis/stock/SBUX?a_aid=CD3289&a_bid=6ae5b6f7
Starbucks’ stock jumps on strong US and China sales growth
Pres Trump said China & the US are in the process of selecting a new site to sign what he has called phase one of a broader trade agreement between the 2 countries. Trump had hoped to ink the deal during a Nov summit of nations from the Asia-Pacific Economic Cooperation group in Chile. But Chilean President Sebastian Piñera announced yesterday that the meeting had been canceled amid widening protests in the capital city of Santiago.
Trump Says U.S. and China Looking for New Site to Sign Trade Deal
Households increased spending headed into the 4th qtr, suggesting consumers have continued to help prop up US economic growth. Personal-consumption expenditures (household spending) rose a seasonally adjusted 0.2% in Sep from Aug, the Commerce Dept reported. Outlays rose at a similar pace in Aug after growing more briskly in H1-2019.
U.S. Consumers Stay on a Spending Streak
Chinese Pres Xi Jinping emerged from a Communist Party conclave with a resolute endorsement of his leadership, despite a slowing economy, a bruising trade war with the US & unrest in Hong Kong. The party's governing Central Committee also signaled a firmer stance on Hong Kong, calling for stronger safeguards for China’s national security in the city—a formulation that some experts say foreshadows new legal powers to squelch dissent against Beijing’s authority.
China’s Communist Party Concludes Conclave in Strong Support of Xi
Gold futures climbed above the key $1500 level to mark their highest settlement in 5 weeks, finding haven-related support from weakness in the US stock market & the $. A news report that said China officials have doubts over prospects for a long-term trade deal with the US fed declines in US stocks & haven demand for gold. Gold for Dec rose $18 (1.2%) to settle at $1514 an ounce. That was the highest most-active contract finish since Sep 26 & largest one-day $ & percentage climb since Oct 2. Chinese officials are expressing doubts about their ability to reach a comprehensive, long-term trade deal with the US despite progress toward signing a “phase one” agreement. A report said Chinese officials have concerns about Pres Trump's impulsive nature & fear he could even back out of the limited deal that both Beijing & DC have signaled they want to sign in coming weeks.
Gold climbs back above $1,500 to settle at a 5-week high
Oil futures declined to settle at their lowest in over a week, with US prices down a 4th session in a row but holding on to a modest gain for the month. Worries about the global economic backdrop were back in focus for oil traders, with prices declining after a round of lackluster factory data out of China & a news report that said Chinese officials have doubts over prospects for a long-term trade deal with the US. West Texas Intermediate crude for Dec fell 88¢ (1.6%) to settle at $54.18 a barrel. Prices fell a 4th straight session and marked their lowest finish since Oct 22. For the month, prices rose 0.2%. Global benchmark Dec Brent crude declined 38¢ (0.6%) to end at $60.23 a barrel, also the lowest since Oct 22. The contract, which expired at the day's settlement, posted a gain of 0.9% for the month. Jan Brent crude, which became the front month, lost 62¢ (1%) at $59.62 a barrel. China’'s official gauge of factory activity, the manufacturing purchasing managers index, fell to an 8 month low of 49.3 in Oct from 49.8 in Sep, the National Bureau of Statistics said. A reading of less than 50 for the survey-based index indicates a contraction in activity. The downbeat economic worries raised concerns over a slowdown in energy demand. Oil futures settled lower on Wed after the Energy Information Administration reported a larger-than-expected increase in US crude inventories.
Oil prices fall to lowest finish in over a week, but cling to a modest monthly climb
After a rough start, the Dow finished the month with a gain of 130. Not bad in a month that has seen some of worst daily declines in history. The status of the US-China trade deal is on hold. Traders are looking for the gov to find a substitute location for the 2 sides to meet & sign a deal (phase I). Until there is clarity, the bears will be in charge of the stock market.
Dow Jones Industrials
