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Deep-Red Start to Close Worst Trading Week in Months
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We’re starting the pre-market trading day notably lower — fitting for such a lousy trading week overall. The Dow, which closed below its 50-day moving average Thursday in what looks to be its worst week in the past five months, is down an additional -174 points at this hour. The S&P 500 is -27 and the Nasdaq -136 points; these two indices are already riding three week losing streaks. Month to date, the Dow is -3.75%, the S&P -5.55%, the Nasdaq -7.59% and the small-cap Russell 2000 -8.46%.
Garishly bad as these numbers are overall — and the past three days of August have been worst of all — if we had to pick one month for a selloff like this to take place, this traditionally low-volume late summer month would be it. Further, with Q2 earnings season on the wane, a re-set (traditionally post-Labor Day) would allow for a new upswing in equities, at least among industries that are seeing stronger guidance for the second half of this year. Especially after a rush to grab a piece of “A.I. fever,” or whatever we would call it, this current pullback currently looks to provide more opportunities than worries.
Speaking of Q2 earnings season, machinery equipment manufacturer Deere & Co. (DE - Free Report) surged past estimates on both top and bottom lines in its fiscal Q3 report out before today’s opening bell. Earnings of $10.20 per share amounted to a +25.3% positive earnings surprise over expectations for $8.14 per share. Revenues of $14.28 billion narrowly outperformed the $14.23 billion expected. Guidance was also bumped higher, although questions about future demand for agriculture equipment — along with our current bearish trading environment — are taking shares down -2% in today’s pre-market. For more on DE’s earnings, click here.
Zacks Rank #5 (Strong Sell)-rated Estee Lauder (EL - Free Report) also posted beats for both earnings and sales for its fiscal Q4 ahead of today’s opening bell: earnings of +$0.07 per share provided a strong positive surprise of +275% over the expected -$0.04 per share. Revenues of $3.61 billion in the quarter outpaced the $3.48 billion in the Zacks consensus. However, soft guidance in an industry that has cooled since post-Covid levels are helping shares lower in early trading, by -6.3% — adding to its -34.7% year-to-date selloff. For more on EL’s earnings, click here.
Next week, the summer doldrums look to continue, with more retail earnings expected but a continued drawdown in Q2 reports overall, with economic prints scheduled — New and Existing Home Sales for July, Durable Goods Orders and S&P PMI Manufacturing/Services and University of Michigan Consumer Sentiment for August — but nothing of the level of monthly jobs or CPI. The biggest event of the coming week looks to be the Jackson Hole Economic Symposium next Thursday and Friday, which will serve as a proxy for an August Fed meeting, as Fed Chair Jerome Powell will give his take on inflation and the ongoing economy.
Image: Bigstock
Deep-Red Start to Close Worst Trading Week in Months
We’re starting the pre-market trading day notably lower — fitting for such a lousy trading week overall. The Dow, which closed below its 50-day moving average Thursday in what looks to be its worst week in the past five months, is down an additional -174 points at this hour. The S&P 500 is -27 and the Nasdaq -136 points; these two indices are already riding three week losing streaks. Month to date, the Dow is -3.75%, the S&P -5.55%, the Nasdaq -7.59% and the small-cap Russell 2000 -8.46%.
Garishly bad as these numbers are overall — and the past three days of August have been worst of all — if we had to pick one month for a selloff like this to take place, this traditionally low-volume late summer month would be it. Further, with Q2 earnings season on the wane, a re-set (traditionally post-Labor Day) would allow for a new upswing in equities, at least among industries that are seeing stronger guidance for the second half of this year. Especially after a rush to grab a piece of “A.I. fever,” or whatever we would call it, this current pullback currently looks to provide more opportunities than worries.
Speaking of Q2 earnings season, machinery equipment manufacturer Deere & Co. (DE - Free Report) surged past estimates on both top and bottom lines in its fiscal Q3 report out before today’s opening bell. Earnings of $10.20 per share amounted to a +25.3% positive earnings surprise over expectations for $8.14 per share. Revenues of $14.28 billion narrowly outperformed the $14.23 billion expected. Guidance was also bumped higher, although questions about future demand for agriculture equipment — along with our current bearish trading environment — are taking shares down -2% in today’s pre-market. For more on DE’s earnings, click here.
Zacks Rank #5 (Strong Sell)-rated Estee Lauder (EL - Free Report) also posted beats for both earnings and sales for its fiscal Q4 ahead of today’s opening bell: earnings of +$0.07 per share provided a strong positive surprise of +275% over the expected -$0.04 per share. Revenues of $3.61 billion in the quarter outpaced the $3.48 billion in the Zacks consensus. However, soft guidance in an industry that has cooled since post-Covid levels are helping shares lower in early trading, by -6.3% — adding to its -34.7% year-to-date selloff. For more on EL’s earnings, click here.
Next week, the summer doldrums look to continue, with more retail earnings expected but a continued drawdown in Q2 reports overall, with economic prints scheduled — New and Existing Home Sales for July, Durable Goods Orders and S&P PMI Manufacturing/Services and University of Michigan Consumer Sentiment for August — but nothing of the level of monthly jobs or CPI. The biggest event of the coming week looks to be the Jackson Hole Economic Symposium next Thursday and Friday, which will serve as a proxy for an August Fed meeting, as Fed Chair Jerome Powell will give his take on inflation and the ongoing economy.
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