Financialbuzz.com: 'Market Recap' Week Ending August 23rd, 2019

NEW YORK, Aug. 23, 2019 /PRNewswire/ -- U.S. markets began the week stronger following optimism revolving around trade talks as well as a global stimulus. The Dow Jones Industrial Average opened 304.42 points or 1.18% higher on Monday morning as U.S. President Donald Trump digested Apple Chief Executive Officer Tim Cook's warning that additional tariffs could hurt Apple's operations and give its rivals a competitive advantage. In response, Trump said Cook made a "good case" and would reevaluate the tariffs. Despite the reevaluation, Trump also made it clear that he does not U.S. companies to do business with Chinese technology giant Huawei because of national security concerns. On Tuesday, markets declined throughout the day as investors focused on the Federal Reserve's Jackson Hole symposium at the end of the week. Despite the decline, markets recovered on Wednesday after the Federal Reserve's meeting minutes from July 30th to July 31st were released. The minutes revealed that the Federal Reserve members believed "it was important to maintain optionality in setting policy." The rate setting Federal Open Market Committee voted 8-2 in favor of lowering short-term interest rates by 25 basis points to 2%-2.25%. Most members who supported the cut agreed with Chairman Jerome Powell stance that it was a "mid-cycle adjustment." The reasoning for cutting the rates is largely due to foreign concern among policymakers over a global economic slowdown as well as the ongoing trade tensions between the U.S. and China. However, markets retreated once again on Thursday as the Dow Jones dropped by over 250 points ahead of the Federal Reserve' symposium after starting the morning higher. Kansas City Federal Reserve President Esther George indicated on Thursday that she would not support further rate cuts. Similarly, Philadelphia's Federal Reserve President Patrick Harker supported the rate cut at first, but now wants rates to remain steady, according to MarketWatch. The Home Depot, Inc. HD, Lowe's Companies, Inc. LOW, Target Corporation TGT, Nordstrom, Inc. JWN, BJ's Wholesale Club Holdings, Inc. BJ

Despite the decline on Thursday, the Dow Jones recovered throughout the end of the day in light of Powell's announcement on Friday about a possible September rate cut. The Dow Jones closed 49.51 points or 0.19% higher on Friday. The S&P 500 closed 1.48 or 0.05% lower, while the Nasdaq Composite finished 28.82 points or 0.36% lower. "We already knew that last months Fed rate cut was likely to be a contentious decision, given the differing views that were already being voiced in the lead-up to the decision," wrote Michael Hewson, Chief Market Analyst at CMC Markets, in a daily research note. "Yesterday's release of the minutes only served to confirm that view, and while Fed [Chairman] Jay Powell pushed the line that the reduction was a "mid-cycle adjustment" policy makers were sharply split on the course of action to take."

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The Home Depot, Inc. HD reported its second quarter financial results before the opening bell on Tuesday. The home-goods retailer provided better-than-expected earnings, but missed analysts' revenue estimates. Despite the revenue miss, Home Depot shares gained 3.7% shortly after the market opened. For the second quarter, Home Depot reported earnings of USD 3.17 per share on revenues of USD 30.84 Billion. Analysts expected earnings of USD 3.08 per share on revenues of USD 30.99 Billion. Same-store sales for the quarter were up 3%, falling short of analysts' estimates of 3.5%. Home Depot reported that revenues increased by 1.2% year-over-year, largely due to the momentum it is experiencing in its strategic investments and believes that the current health of the U.S. consumer and stable housing environment is continually growing. Based on the impact from the impact of lumber sales, Home Depot is now forecasting fiscal 2019 sales growth of approximately 2.3% and comp sales up 4.0%. Additionally, the Company reaffirmed diluted earnings-per-share growth of USD 10.03, increasing by 3.1% compared to fiscal 2018. Previously, Home Depot expected sales growth of 3.3% for fiscal 2019. 

Lowe's Companies, Inc. LOW reported its second quarter financials during pre-market hours on Wednesday. The home improvement retailer topped analysts' estimates, sending shares 10% higher. For the second quarter, Lowe's reported earnings of USD 2.15 per share on revenues of USD 20.99 Billion. Analysts expected earnings of USD 2.01 per share on revenues of USD 20.94 Billion. Lowe's reported same store sales of 2.3%, beating estimates of 1.9%. Revenue increased marginally by 0.5% compared to the second quarter of last year. Lowe's mentioned that its financials were impacted by lumber deflation and difficult weather. Nonetheless, the Company was able to report positive comparable sales in all of its 15 regions across the U.S. As for the rest of fiscal 2019, Lowe's expects revenue to increase by 2%, while comparable sales is projected to rise by 3% compared to fiscal 2018. Lowe's also expects earnings between USD 5.45 to USD 5.65 per share. 

Target Corporation TGT reported its second quarter financial results before the opening bell on Wednesday. The retailer reported better-than-expected results and provided an upbeat guidance, sending shares surging by over 17.7% to USD 100.77 per share. For the second quarter, Target reported earnings of USD 1.82 per share on revenues of USD 18.42 Billion. Analysts expected earnings of USD 1.62 per share on revenues of USD 18.34 Billion. Second quarter comparable sales grew by 3.4%, driven primarily by a 2.4% traffic growth during the quarter. For both the third quarter and second half of fiscal 2019, Target expects comparable sales growth to fall in-line with 3.4% growth in the second quarter. For the third quarter, the Company expects to report adjusted earnings between USD 1.04 to USD 1.24 per share. And as for the full year, Target now expects earnings of USD 5.90 to USD 6.20 per share, compared to its previous forecast of USD 5.75 to USD 6.05 per share. 

Nordstrom, Inc. JWN reported its second quarter financial results during extended trading hours on Wednesday. The retailer crushed analysts' earnings estimates but fell short of revenue projections. For the second quarter, Nordstrom reported earnings of USD 0.90 per share on revenues of USD 3.87 Billion. Analysts expected earnings of USD 0.75 per share on revenues of USD 3.93 Billion. In Full-Price, revenue decreased by 6.5% compared to the same period last year. Off-Price revenue declined by 1.9%. Nordstrom reported total company digital sales grew by 4%, accounting for 30% of the business. For the full-year, Nordstrom is expecting net sales to either decrease by 2% or remain flat. Additionally, the Company lowered the higher-end of its guidance and now expects earnings between USD 3.25 to USD 3.50 compared to its previous outlook of USD 3.25 to USD 3.65 per share. 

BJ's Wholesale Club Holdings, Inc. BJ reported its second quarter financial results before the opening bell on Thursday. The wholesale retailer reported better-than-expected results and affirmed its guidance, sending shares soaring by 14.4%. For the second quarter, BJ's reported earnings of USD 0.39 per share on revenues of USD 3.35 Billion. Analysts expected earnings of USD 0.37 per share on revenues of USD 3.39 Billion. Comparable club sales for the quarter increased by 1.6% compared to the same quarter a year prior, matching analysts' estimates. As for the remainder of fiscal 2020, BJ's is expecting earnings between USD 1.42 to USD 1.50 per share on revenues of USD 12.9 Billion to USD 13.2 Billion. 

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