What's moving markets today: May 29, 2019
Abercrombie & Fitch (ANF) shares plummeted 25% in early trading after a dismal earnings report, where it reported lower-than-expected sales in stores open more than a year.
The retailer also said it's shutting down three Abercrombie & Fitch flagship stores and one Hollister store.
Abercrombie & Fitch closures:
- Copenhagen will close later this quarter.
- Milan will close by the end of this year.
- Fukuoka, Japan will close in the second-half of 2020.
- SoHo location in Manhattan will close in the second quarter of this year.
The closures are part of its plan to "pivot away from large format stores to smaller ... brand experiences," the company said.
Dick's Sporting Goods (DKS) stock fell 5% in early Wednesday trading, erasing the company's earlier gains.
Dick's said that it was "still working through the impact" of the latest round of tariffs on Chinese goods, and that it had not factored the tariffs into its guidance.
"We are closely monitoring the situation and are hopeful that a trade agreement can be reached," Dick's CFO Lee Belitsky told analysts on a call Wednesday.
The company also said it plans to open seven new stores this year and relocate three stores.
In March, Dick's said it will stop selling guns and ammunition at 125 stores where firearm sales have struggled. Last year, the company stopped selling assault-style weapons after the mass shooting at a Parkland, Florida, high school.
Dow futures were down more than 100 points with a little less than two hours to go before the market opens.
The drop in futures isn't all that dramatic, but it follows a puzzling, sudden drop in stocks Tuesday afternoon. The Dow was trading about 100 points higher at midday yesterday and the floor suddenly gave way. Stocks finished yesterday more than 200 points lower.
That unnerved investors who hoped for a break after five straight negative weeks for the Dow -- the longest streak since 2011.
S&P 500 futures and Nasdaq futures were down about 0.7% and 0.8%, respectively.
Canada Goose (GOOS) shares are falling from the sky — down as much as 22% — after it slightly missed on revenue and issued mixed guidance in its latest quarterly earnings.
It wasn't all bad for the luxury jacket maker. Its net income for the first three months of 2019 rose 11% compared to the same period a year earlier. Canada Goose said its direct to consumer business is growing.
If its premarket losses are maintained at the open, it will wipe away all of its year-to-date gains.
Despite Uber's less-than-impressive performance after going public, one analyst remains optimistic on the company.
Wedbush Securities' Daniel Ives said in a new note that that despite the "negative noise," he remains positive on Uber (UBER).
The company went public earlier this month and is trading 9% below its $45 IPO price
"This week marks an important step forward for Dara & his team to prove to the Street that this business model is still in the early days of playing out," Ives said of Uber's first earnings report, which comes out Thursday.
Ives admitted that it will be a "long and winding road for Uber" to prove its value, he's optimistic the company will successfully expand beyond ride-hailing:
A core tenet of our bull thesis is around Uber's ability to morph its unrivaled ridesharing platform into a broader consumer engine with Uber Eats, Uber Freight, and autonomous initiatives 'just scratching the surface' of the full monetization potential."
Boeing (BA) shares slid 1.4% in premarket trading after the head of a global airline group said the troubled Boeing 737 Max likely won't return to the air until August.
Alexandre de Juniac, the director general of International Air Transport Association, told reporters that the plane won't re-enter service for at least another 10 to 12 weeks.
"But it is not our hands," he added according to Bloomberg. "That is in the hands of regulators."
He added that airlines, government regulators and Boeing will hold another meeting within the next five to seven weeks to discuss the 737 Max.
ExxonMobil (XOM) is bracing for stiff opposition at Wednesday's annual shareholder meeting from activists and shareholders upset with the oil giant's stance on climate change.
All eyes will be on a shareholder proposal that calls for Exxon to install an independent board chair during its next CEO transition. Exxon opposes the shareholder proposal, noting its board comprises entirely independent directors, other than the CEO. However, the proposal has received support from the Church of England’s endowment fund and the New York State pension fund.
Those groups are irked by Exxon’s successful effort to lobby the SEC to block a separate resolution they proposed that would have urged the company to adopt and disclose greenhouse gas emissions targets.
"The transition to the low-carbon economy is the single greatest challenge the company faces,” Edward Mason, head of responsible investment at the Church Commissioners for England, told CNN Business.
The greenhouse gas emissions proposal that was blocked by the SEC was backed by Mason and other investors with a total of $9.5 trillion in assets. That group, known as Climate Action 100+, previously reached agreements with Royal Dutch Shell, Equinor, BP and other oil giants.
We believe the issues we have been having with engagement at Exxon are linked to governance of the company,” said Mason.
Another round of retail earnings is keeping the US-China trade war front of mind for investors.
Retailers including Abercrombie & Fitch (ANF) and Dick's Sporting Goods (DKS) report earnings from the first three months of the year on Wednesday. Both are expected to post results before the US market open.
Major retailers have developed strategies to blunt the impact of tariffs so far. But they're starting to warn that the trade war is affecting business.
Walmart (WMT), Target (TGT), Home Depot (HD), Kohl's (KSS) and Macy's (M) all said that the tariffs have forced them to either alter their financial outlooks, remodel carefully crafted supply chains or consider raising price tags for customers.
US stock futures were pointing lower on Wednesday after a rough start to the week.
- 🔔 The Dow is set to open down 148 points, or 0.6%. The Nasdaq could drop 0.8% and the S&P 500 is poised to fall 0.6%.
- 🌏 That follows a difficult trading session in Asia. Hong Kong's Hang Seng index dropped 0.5% and Japan's Nikkei shed 1.2%. The exception was the Shanghai Composite index, which gained almost 0.2%.
- 🌍 European markets are building off those losses in early trading. Britain's FTSE 100 dropped 1.1%, while France's CAC 40 lost 1.6% and Germany's DAX index fell 1.2%.