What's moving markets today: May 30, 2019

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12:23 p.m. ET, May 30, 2019

LaCroix sales are in a 'free fall'

The popularity for LaCroix has fizzled out, according to an analyst.

Sales for the flavored carbonated water are "effectively in free fall," wrote Laurent Grandet, a beverage analyst for Guggenheim, in a new note.

He cited increased competition for similar-type beverages, the "lack of meaningful or disruptive innovation," and blamed inexperienced management from its parent company, National Beverage (FIZZ).

Grandet added:

We think it’s unlikely that LaCroix can recover to any meaningful degree while in the hands of National Beverage (or in the absence of a strong distribution partner)."

National Beverage CEO Nick Caporella once bizarrely said a drop in LaCroix sales "was the result of injustice!"

National Beverage's stock is down 1.6% in early trading and down 35% for the year.

11:11 a.m. ET, May 30, 2019

Kraft Heinz can't catch a break -- stock is down again

The news keeps getting worse for Kraft Heinz. Shares of the Warren Buffett-backed company tumbled 3% Thursday after an analyst at Credit Suisse cut his price target on the stock to $26 a share -- below the current price. The stock is now down nearly 37% this year.

Kraft Heinz (KHC) has already said it was restating earnings from 2016 and 2017 because of employee misconduct. And the company has yet to report its most recent results for the second quarter. That's not a good sign, according to Credit Suisse's Robert Moskow.

Moskow argues that there could be more bad news to come, saying that "we have no visibility into whether the SEC is satisfied with the company’s response, whether its accounting firm PwC will sign off on the financials, or whether the company has put in place sufficient controls to restore confidence in its financial reporting."

And Moskow said the aggressive cost cutting and layoffs at Kraft Heinz since Buffett's investing partner 3G Capital took over may be the root of the problem.

We fear that the dramatic reduction in Kraft Heinz’ headcount after its merger may have played a role in the breakdown of internal controls. When a company loses institutional knowledge in highly complex areas of the business, the consequences can be severe," he wrote. 

10:16 a.m. ET, May 30, 2019

CBS and Viacom pop on reported merger talks

CBS and Viacom might become a single company once again, according to a new report.

CNBC says merger talks could begin in mid-June.

Both stocks jumped on the news in early trading: CBS (CBS) popped nearly 5% and Viacom (VIAB) leapt 4%.

Viacom is best known for its cable channels, including MTV and Nickelodeon, and movie studio Paramount. CBS controls the CBS broadcast network, Showtime and streaming network CBS All Access.

The two companies split up in 2006.

9:41 a.m. ET, May 30, 2019

US markets start in the green after recent slide; Calvin Klein owner plunges 10%

Wall Street started Thursday's session in positive territory, marking a modest rebound from the recent bout of selling.

The gains come after the S&P 500 declined 1.5% during the prior two trading days due to concerns about the US-China trade war and plunging bond yields.

The Dow is still on track for its sixth consecutive losing week. That hasn’t happened since June 2011.

Analysts said Wall Street could soon be due for a rebound given the recent tumble. Based on technical indicators, nearly half of the stocks in the S&P 500 are "oversold," according to Bespoke Investment Group. That's the highest since early January.

"The market is approaching some levels that can be considered extreme in the short-run," Paul Hickey, Bespoke's co-founder, wrote in a note to clients.

PVH (PVH), the owner of Timmy Hilfiger and Calvin Klein, plunged 10% after warning of weaker demand in the United States and China.

Dollar General (DG) jumped 5% on solid sales growth driven by higher traffic and shoppers spending more. 

9:16 a.m. ET, May 30, 2019

Corporate profits decline

Corporate profits tumbled by 2.8% in the first quarter, according to a government reading released Thursday, the biggest decline since 2015.

The $65.3 billion drop in overall profits follows a $9.7 billion drop in the final three months of last year. It also marked the first time since 2015 that there had been consecutive quarters of declining profits.

Profits improved in the nation's financial sector. But the brewing trade disputes between the United States and its trading partners apparently cut into the profits of non-financial companies. Domestic companies outside of finance suffered a 4.4% drop in profits, and earnings of foreign firms operating here fell 2.2%.

But the gross domestic product, the broad measure of the nation's economic activity, climbed by 3.1% in the quarter, a slight revision lower from the initial reading a month ago.

8:30 a.m. ET, May 30, 2019

Tommy Hilfiger owner hit by US-China weakness

Another day, another apparel retailer warning of weakening demand in both the US and China.

Shares of PVH (PVH), the owner of the Tommy Hilfiger and Calvin Klein brands, were set to plunge more than 10% Thursday after issuing a softer outlook.

The news comes one day after Michael Kors, Versace and Jimmy Choo owner Capri Holdings (CPRI) gave bleak guidance.

PVH chairman and CEO Emanuel Chirico didn't blame the US-China trade war for its reduced forecast per se. But he made it clear that both economies are starting to show cracks -- particularly when it comes to consumer spending.

The volatile and challenging macroeconomic backdrop has continued into the second quarter, with particular softness across the U.S. and China retail landscape," Chirico said.

Chirico added that the stronger dollar will take a bite out of earnings going forward. That's something that will likely hurt other big multinational companies in the months to come.

8:31 a.m. ET, May 30, 2019

Family Dollar's remodeled stores are paying off

The newly remodeled Family Dollar stores seem to be paying off:

The chain's parent company Dollar Tree (DLTR) revealed the sales boost in its earnings report. But the stock is down 3.5% in premarket trading after warning that its second quarter sales will lower than expected.

7:38 a.m. ET, May 30, 2019

Dollar General is one of the winners in retail right now

Dollar General (DG) continues to grow at a steady pace, despite pressure from Walmart (WMT) and Target (TGT).

Sales at Dollar General stores open at least a year grew 3.8% last quarter compared with a year ago. An uptick in customer traffic and shoppers spending more when they visited stores lifted sales, the company said Thursday.

Dollar General beat Wall Street's expectations on sales and profit, sending its stock up 5% during pre-market trading.

The company opened 240 new stores during the first quarter of the year and expects to open 975 new stores this year. Dollar General has around 15,600 across the country.

Dollar General is now turning its focus to the latest technology in retail: mobile apps, self-checkout and buy online, pickup in store.

The company's shoppers are increasingly using this tech to shop. Digital is becoming a "big part" of customers' lives, Dollar General chief executive Todd Vasos has said.

6:49 a.m. ET, May 30, 2019

China accuses US of ‘economic terrorism’ for provoking trade war

China’s Ministry of Foreign Affairs has accused the United States of committing "economic terrorism” as the two countries fight a trade war.

The White House has "brought huge damage to the economy of other countries and the US itself," spokesperson Lu Kang told reporters in Beijing on Thursday.

Lu added that US trade policy is "typical economic terrorism, economic hegemonism, and economic unilateralism."