What's moving markets today: June 4, 2019
Looking for another sign of how fragile the global economy is? Shoppers aren't as willing to buy expensive bling in little blue boxes from Tiffany when they go on vacation.
Shares of Tiffany (TIF) fell 3% in early trading Tuesday after the high-end jeweler reported a drop in sales from a year ago that was bigger than expected. CEO Alessandro Bogliolo blamed the decline on a stronger dollar and "dramatically lower worldwide spending attributed to foreign tourists." Tiffany also noted that "continuing sales pressures" would weigh on results for the rest of the year.
The slowdown in tourist spending wasn't just a problem at the company's flagship store on Fifth Avenue in New York City either. Tiffany also cited weak demand from foreigners in the rest of the Americas, Japan and most of its Asia-Pacific stores.
One positive: The US trade war with China may not be hurting affluent consumers there just yet. Tiffany cited "strong growth in mainland China" as a bright spot.
The US dollar drifted to a three-week low on the back of yesterday's comments from St. Louis Fed President James Bullard, who said an interest rate cut could be warranted soon.
In the aftermath of Bullard's comments, the buck, measured by the ICE US Dollar Index, dropped to 97.115, according to Refinitiv.
The dollar last year benefited from the Fed's hiking strategy, as higher interest rates make a currency more attractive for investors.
Bullard's remarks were linked to risks to economic growth in light of the trade war, as well as domestic inflation that keeps underperforming the Federal Reserve's target. The St. Louis Fed boss is a voting member on the US central bank's monetary policy committee.
Fed Chairman Jerome Powell is due to deliver a speech this morning and market participants will be watching closely whether he will echo his colleagues rhetoric.
Box (BOX) shares sank nearly 18% in premarket trading after it slashed its revenue guidance for the rest of the year, per our Paul R. La Monica:
If the premarket losses hold after the open, the cloud management company will have wiped out all of its modest year-to-date gains.
Luxury electronics maker Bang & Olufsen is struggling. The Danish company's stock plunged 19% in Copenhagen after it said its revenue for the fiscal year ended May 31 was worse than anticipated.
It expects sales for the last financial year to have sunk 14%, worse than 10% the company previously expected.
Clearly our financial performance this year has not been satisfactory, and we are very disappointed with the development," CEO Henrik Clausen said in a release.
Clausen expects to "deliver profitable growth" this year.
Bang & Olufsen makes expensive electronics, such as $900 headphones and $10,000 televisions.
It was founded in 1925 building radios before expanding into other electronics, such as record and CD players. The company operates nearly 600 stores worldwide.
Shell (RDSA) said Tuesday that it anticipates spending $125 billion on dividends and share buybacks between 2021 and 2025.
The move suggests management believes the company is well positioned despite recent pressure on oil prices. Brent crude, the global benchmark, dropped more than 11% last month.
The company reaffirmed its commitment to its conventional oil and gas business, along with its investment in natural gas and chemicals, even as it pursues climate change standards.
Shell is the only major energy company that has committed to cutting emissions generated by both its activities and the products it sells. It said in December it would link executive pay to the goals.
The company's shares dropped 0.9% Tuesday.
News that big tech companies face antitrust scrutiny from US lawmakers and regulators has pushed the Nasdaq into a correction.
The Justice Department and the Federal Trade Commission are reportedly taking steps to begin their own probes.
- Already under pressure from trade tensions, the Nasdaq dropped 1.6% yesterday. It's now 11% off highs at the beginning of May.
- Google parent Alphabet closed down more than 6%, while Facebook fell 7.5%. Shares in both companies stabilized in premarket trading today.
- US stock futures point slightly higher, with the Dow set to rise 100 points, or 0.4%. The Nasdaq and S&P 500 are set for similar gains.
- In Europe, the FTSE 100 climbed 0.2% in early trading, while Germany's DAX rose 0.9%. Stocks in Asia finished lower, with Hong Kong's Hang Seng dropping 0.5% and the Shanghai Composite losing almost 1%.
President Donald Trump's trip to London is shifting to business.
Trump is meeting with UK Prime Minister Theresa May and business leaders, and a potential United States-United Kingdom trade deal is on the agenda.
Trump said Tuesday that a trade agreement between the countries would be "substantial" and "very fair."
But what he wants might be hard to get. Here's why.