Financialbuzz.com: 'Market Recap' Week Ending August 16th, 2019

NEW YORK, Aug. 16, 2019 /PRNewswire/ --  U.S. markets faced an extremely volatile week due to the ongoing concerns over the U.S.-China trade war. On Monday, the Dow slipped by over 400 points after The People's Bank of China (PBOC) set the daily midpoint for yuan trading at 7.0211 per dollar, which marked the consecutive session below the level of 7 per dollar. Last week, PBOC rattled global markets after it devalued the yuan in retaliation to U.S. President Donald Trump's additional 10% tariff on USD 300 Billion worth of Chinese goods. However, on Tuesday, a U.S. Trade Representative said that the tariffs would be delayed until December 15th, postponing it from Trump's original intended date of September 1st. The USTR spokesman noted that the delay would be applied to products such as cellphones, laptops, and video games. The postponement of the tariffs caused the Dow to surge by over 500 points. Despite the optimistic news, markets pulled back once again on Wednesday after recession indicators shocked markets. The Dow plunged by 800 points or 3.1% lower on Wednesday after the 10-year U.S Treasury note fell below that of the 2-year U.S. Treasury note for the first time in over a decade. The inverted yield curve is commonly seen as a recession indicator, which led investors to believe that the economy will slow down or contract within the near future. After the Dow plummeted on Wednesday, markets opened slightly higher on Thursday after a spokesperson for China's Ministry of Foreign Affairs said that China hopes the U.S. will meet it halfway and implement the consensus that the two parties agreed on at the Summit in Osaka earlier in the summer. JD.com, Inc. JD, Macy's, Inc. M, Alibaba Group Holding Limited BABA, Walmart Inc. WMT, Nvidia Corporation NVDA

In addition to global economic weakness, the ongoing Hong Kong protests also disrupted global equities after protestors stormed the Hong Kong International Airport. The large and violent protests ultimately led the airport to cancel all inbound and outbound flights, causing the Hang Seng Index to crater by 574.09 points or 2.1% this week. On Thursday, the Dow Jones closed 109.83 points or 0.43% higher. The S&P 500 edged higher by 7.07 points or 0.25%, while the Nasdaq Composite declined by 7.32 points or 0.09%. "The global economy would likely see a recession if the US escalates tariffs on China to 25% for an extended period," Morgan Stanley Equity Analyst, Michael Wilson wrote in a note. "Small and mid-cap companies are seeing an earnings growth problem - their first quarter year over year earnings growth fell by double digits. Earnings held up better among large caps (roughly flat for the S&P 500 in the first half) but we think second half 2019 and 2020 consensus numbers need to come down substantially."

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JD.com, Inc. JD reported its second quarter financial results before the market open on Tuesday. The Chinese tech giant reported better-than-expected results, sending shares 6.3% higher. For the second quarter, JD reported earnings of RMB 2.30 (USD 0.33) per share on revenues of RMB 150.3 Billion (USD 21.9 Billion). Analysts' estimates earnings of USD 0.07 per share on revenues of USD 20.89 Billion. The stronger quarter led JD to report a massive growth in net income. At the end of the second quarter, JD reported that net income was RMB 618.8 Million (USD 90.1 Million) compared to a net loss of RMB 2,212.5 Million the same quarter a year ago. On a non-GAAP basis, net income surged by 644% to RMB 3,558.9 Million (USD 518.4 Million). Annual active accounts increased to 321.3 million compared to 310.5 million a year ago. For the third quarter, JD expects to report net revenues between RMB 126 Billion and RMB 130 Billion, representing a 20% to 24% increase year-over-year.

Macy's, Inc. M reported its second quarter financial results before the opening bell on Wednesday. The retailer missed analysts' earnings estimates and lowered its guidance, sending shares plummeting by as much as 17%. For the second quarter, Macy's reported earnings of USD 0.28 per share on revenues of USD 5.546 Billion. Analysts expected earnings of USD 0.45 per share on revenues of USD 5.542 Billion. Macy's noted that its slower quarter was a result of rising inventory challenges such as a fashion miss in its women's sportswear private brands, slow sell-through of warm weather apparel and accelerated decline in international tourism. Based on the quarterly results, Macy's lowered its guidance for the remainder of the year. Now, the Company expects earnings between USD 2.85 to USD 3.05 per share compared to its previous forecast range of USD 3.05 to USD 3.25 per share. Macy's expects revenue to remain flat year-over-year.

Alibaba Group Holding Limited BABA reported its first quarter financial results before the opening bell on Thursday. The Chinese e-commerce giant reported better-than-expected results, driven by its increase in customers and cloud computing segment, sending shares 5% higher during pre-market hours. For the first quarter, Alibaba reported earnings of RMB 12.55 (USD 1.83) per share on revenues of RMB 114.92 Billion (USD 16.74 Billion). Analysts expected earnings RMB 10.25 per share on revenue of RMB 111.73 Billion. Alibaba also witnessed its revenues surge by 42% year-over-year, driven by its increase in annual active consumers and mobile monthly active users. Annual active consumers reached 674 million at the end of the quarter, representing an increase of 20 million year-over-year. Monthly MAUs rose by 34% to 755 million. Alibaba's cloud computing segment also helped drive the stronger quarter by reporting RMB 7.78 Billion (USD 1.13 Billion) in revenue, representing a 66% increase year-over-year. The increase in customers on Alibaba's platforms and cloud computing growth allowed the Company to deliver a 204% year-over-year increase in income from operations, reaching RMB 24.37 Billion (USD 3.55 Billion).

Walmart Inc. WMT reported its second quarter financial results during pre-market hours on Thursday morning. Walmart topped analysts' estimates and provided an upbeat guidance, sending shares 5% higher. For the second quarter, the retailer reported earnings of USD 1.27 per share on revenues of USD 130.4 Billion. Analysts expected earnings of USD 1.22 per share on revenue of USD 130.11 Billion. The stronger quarter was driven by Walmart's increase in U.S. comparable sales of 7.3%, which is the largest growth its experienced in over 10 years. Walmart's U.S. eCommerce sales grew by 37% year-over-year, primarily driven by strength in its online grocery unit. While U.S. sales rose by 2.9% year-over-year to USD 85.2 Billion, international sales slipped by 1.1% to USD 29.1 Billion. As a result of the quarter, Walmart revised its guidance and provided a better outlook. For fiscal 2020, Walmart is expecting earnings to slightly decrease or slightly increase compared to its previous forecast calling for a low-single digit percentage decline. Additionally, Walmart also projects U.S. comparable sales growth to fall in the upper range between 2.5% to 3%.

Nvidia Corporation NVDA reported its second quarter financial results during extended trading hours on Thursday. The Company topped analysts' estimates for both revenue and earnings, sending shares 6% higher. For the second quarter, Nvidia reported earnings of USD 1.24 per share on revenue of USD 2.58 Billion. Analysts expected earnings of USD 1.15 per share on revenue of USD 2.54 Billion. Despite the quarterly beat, Nvidia's revenue declined by 17% year-over-year, while its net income decreased by 37%. Nvidia's gaming segment reported revenues of USD 1.31 Billion, slightly above estimates of 1.30 Billion. Meanwhile, Nvidia's data center segment reported revenues of USD 655 Million, below estimates of USD 668.5 Million. However, as for the next quarter, Nvidia expects to report revenue of USD 2.90 Billion, plus or minus 2%, which is below estimates of USD 2.97 Billion.

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