The White House is considering adding five Chinese companies involved in the manufacture of surveillance equipment to the blacklist that
barrs them from using U.S. components or software. Shares of Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co.
plunged in Shenzhen after reports of the potential move were published.
What it means: “Ditching the Chinese company and switching to these firms could mean ripping out the Huawei-built 4G foundations they’d planned to bolt its 5G radios onto, a move that they say would cost billions as well as choke competition and innovation in the market.”
This is called escalation… see my market thoughts at end of post.
China’s largest airlines asked Boeing to pay up. Air China, China Southern Airlines, and China Eastern Airlines want to be compensated for losses related to the grounding of the 737 Max in March. The aircraft manufacturer was also hit with a lawsuit yesterday by the French families of passengers killed in the 737 Max Ethiopian Airlines crash.
Saudi Aramco diversified its energy business. The oil giant
struck a deal for a 25% stake in the first part of a Texas natural gas project by US company Sempra Energy, part of
Saudi Arabia’s $150 billion effort(paywall) to expand its gas projects at home and abroad. SRE
Reuter’s:
In Other News:
Trump told Democratic leaders Tuesday that he believes Congress should first pass a new trade deal with Canada and Mexico before taking up a bill to boost the nation’s infrastructure.
Japanese exports declined for the fifth straight month in April,
Traditional retailers continue to suffer, with shares hit by
dismal results from Nordstrom Inc., J.C. Penney Co. and Kohl’s Corp. yesterday. Lowe’s Cos Inc., Target Corp., L Brands Inc. and VF Corp are due to report.
I mean,
Nordstrom had a rough first quarter!! The retailer’s earnings, revenue, same-store sales, and guidance all fell short of Wall Street’s expectations. And they say the US consumer is fine…
$URBN was the rare beat in Retail…and it is down 5%
AAPL: GS see 23% EPS downside, eliminating China from P & L
TSLA: PT lowered to $191 with serious criticism about auto pilot capabilities
LOW: Earnings profit miss, full year guidance slashed- down 9% pre
Tuesday’s Key Earnings
AutoZone (NYSE:AZO) +5.6%improving market share.
Home Depot (NYSE:HD) +0.3%beating estimates, reaffirming outlook.
J.C. Penney (NYSE:JCP) -7%posting an EBITDA miss.
Kohl’s (NYSE:KSS) -12.3% lowering its 2019 forecast.
Nordstrom (NYSE:JWN) -9.3% AH missing on top and bottom lines.
Pure Storage (NYSE:PSTG) -19.5%AH on wider loss, weak outlook.
TJX Companies (NYSE:TJX) +0.6%topping expectations.
Urban Outfitters (NASDAQ:URBN) -6.2% AH following a margin sales miss.
Fed Minutes 2:00 ET
My focus will be around the discussion on the
future composition of the bank’s balance sheet given projections of large-scale Treasury purchases. As I mentioned repeatedly, I still expect Volatility after VX expiration Wed + disappointment from FOMC minutes that likely show NEUTRAL stance – no rate cut or hike. Market has priced in TWO rate cuts in the next year. Post Powell speech Monday night – in reading between the lines – I see NO rate cut coming. If he could raise, he would!
Market Thoughts
The S&P 500 Index rose as much as 1.01% on Monday in its biggest gain since April 1 – with very strong breadth I might add. This after a decision by the U.S. to grant limited relief for consumers and carriers that
do business with Huawei Technologies, a day after they blacklisted them.
It sure isn’t because of Q1 Earnings Reports!
Profits grew just 0.71% in the first quarter based on the 92% of the S&P 500 members that have reported first-quarter results, a rate of increase that doesn’t even beat the current low rates of inflation, according to Bianco Research. “This means there is no ‘real’ growth, so it would be difficult to describe (first quarter) results as great,” Jim Bianco,
It’s unlikely to get better anytime soon, with estimates calling for earnings growth of just 1.1% this quarter and 1.8% in the third quarter, before miraculously surging 8.1% in the final three months of the year. So, stocks might be able to avoid the earnings recession predicated by many at the start of the year, but there’s still a rising dollar to worry about.
The Fed’s Trade Weighted Real Broad Dollar Index is back to about its highest level since 2003 and global trade volumes are the lowest since the financial crisis.
