China and emerging market slowdown fears pressured the global equity markets this week, with the Dow Jones recording its worst loss since February 2014. News that Greek Prime Minister Tsipras resigned on Friday added to the volatility, with reports of a separation of the ruling Syriza party. A snap election is expected to be held in late September.
Seesaw session for the Dow Jones on Monday, with the index finishing 0.2% higher. Reacting to disappointing NY manufacturing data, investors soon took comfort in decade-high home building sentiment, with Wall Street swinging back into the black in the afternoon.
- The Walt Disney Company (DIS ) finished the session 1.8% higher after the company announced that Star Wars-themed attractions and rides would be added to its fun parks. DIS has a dividend yield of 1.32%.
- Spectra Energy (SE ) retreated 0.5% on Monday, after investors reacted to speculation of a takeover of energy company Williams. SE has a dividend yield of 5.24%.
Disappointing earnings guidance, coupled with worse-than-expected Building Permits, pushed the S&P 500 into negative territory on Tuesday. Reporting 1.12 million residential construction approvals for the July period, the Census Bureau also released monthly Housing Starts. The 1.21 million figure was slightly better than initial economists’ forecasts.
- Wal-Mart (WMT ) confirmed that currency and cost pressure dented quarter earnings, with an EPS of $1.08 recorded. The retail giant also noted in its earnings release that it would reduce the proposed number of new stores it would be opening. WMT has a dividend yield of 2.81%.
- Home Depot (HD ) reported a revised EPS expectation of between $5.31 – $5.36 for the year. Investors reacted positively to the news, pushing the stock 2.6% higher. HD has a dividend yield of 1.97%.
Concerns of a China slowdown played on Wall Street, with the Dow Jones falling nearly 1% to finish at 17,348.73. The Consumer Price Index month on month was 0.1%, below initial forecasts of 0.2%. Wednesday also saw the release of the FOMC minutes. These highlighted monetary policy indecision.
- Yum Brands (YUM ) finished the session 2.2% higher, after the company announced a management restructure and appointment of a new CEO. YUM has a dividend yield of 2.04%.
Equity markets plummeted on Thursday off the back of global contagion fears. Devaluation of the yuan, coupled with weaker Chinese economic data, played on investors’ minds. The Dow Jones finished 2.06% or 358 points lower. The index is now 7% from its May high.
- The Gap Inc. (GPS ) fell in line with earnings estimates on Thursday, with the fashion label reporting an EPS of 52 cents. Margins fell to 37.4%. GPS has a dividend yield of 2.74%.
Wall Street looks to finish the week on a bad note, with the NASDAQ tumbling 1.26% in early trade. Factory activity in China painted a grim picture, with the Caixin PMI falling to a six-year low. Across the pond, the U.S. Flash Manufacturing figure came in at 52.9, which was well below consensus forecasts of 53.9.
- Deere & Co. (DE ) reported a 40% fall in earnings for the quarter, with the company also highlighting a 24% fall in farm machinery sales. DE has a dividend yield of 2.88%.
Next week will see earnings reports from: Golar LNG Partners LP (GMLP ), Golar LNG Ltd. (GLNG ), Hoegh LNG Partners LP (HMLP ), Best Buy (BBY ), Children’s Place Retail Stores Inc. (PLCE ), Daktronics Inc. (DAKT ), DSW Inc. (DSW ), E-House (China Holdings) (EJ ), Global Specialty Metals (GSM ), Heico Corp. (HEI ), Jack Henry & Associates (JKHY ), Sanderson Farms (SAFM ), Solera Holdings (SLH ), Standex International Corp. (SXI ), Abercrombie & Fitch (ANF ), Avago Technologies (AVGO ), Chico’s FAS (CHS ), Guess Inc. (GES ), Pall Corp. (PLL ), Williams Sonoma (WSM ).
The following economic data will also be reported: Case Shiller 20 City Index, New Home Sales, Consumer Confidence on Tuesday; MBA Mortgage Index and Durable Orders on Wednesday; Initial Claims, Continuing Claims, GDP and Pending Home Sales on Thursday; and Personal Income, Personal Spending, UOM Sentiment on Friday.
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