On today’s episode of Free Lunch, Associate Stock Strategist Ryan McQueeney discusses Pepsi’s earnings results, Amazon’s minimum wage bump, and analyst reports for Square and Dropbox. Later, he is joined by Dave Bartosiak to discuss the news and to highlight key things to know about Stitch Fix and Nafta 2.0.
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U.S. stocks shook off an early dip and trudged into the green in early afternoon trading Tuesday, but Wall Street was generally apathetic as investors wait patiently for fresh jobs data due later this week.
Shares of PepsiCo (
PEP - Free Report) pulled back slightly after the beverage behemoth reported earnings before the bell. Pepsi extended its streak of outperforming earnings estimates, and revenue for the most recent quarter was also better-than-expected. However, the company warned of a stronger U.S. dollar cutting into international profits and reduced its full-year guidance by five cents.
Meanwhile, shares of Amazon (
AMZN - Free Report) opened lower in the wake of the e-commerce leader announcing that it is raising its minimum wage for U.S. workers to $15 an hour. The Jeff Bezos-led company will also be giving raises to hourly employees already making $15 an hour or above.
Amazon has been criticized for its treatment of hourly employees, especially in its fulfillment centers. A pay raise does not necessarily improve working conditions, but it should provide a nice morale boost as we head toward the busy holiday shopping season.
Elsewhere, analysts were busy on Tuesday morning, issuing new research reports for trendy stocks such as Dropbox (
DBX - Free Report) and Square ( SQ - Free Report) . Dropbox has shed more than 30% from its post-IPO highs as investors grow concerned about its mounting competition, while Square has surged over 100% in the past six months en route to becoming one of tech’s most impressive stories of the year.
On the first half of today’s Free Lunch, Ryan recaps these headlines and provides his perspective on the news!
Later, he is joined by Zacks Strategist Dave Bartosiak to chat about a number of major stories breaking over the past few days.
First, Dave and Ryan discuss the revisions made to Nafta, which is now set to be called the United States-Mexico-Canada Agreement, or USMCA. The pair point out the changes the new deal makes to the auto, dairy, and lumber businesses, ultimately concluding that its revisions are noticeable-but-not-revolutionary changes to the existing Nafta structure.
Ryan and Dave also talk about Stitch Fix (
SFIX - Free Report) , a subscription-based e-commerce company with a focus on personal clothing. Shares of SFIX tanked after the firm missed revenue estimates yesterday, so Dave took a moment to explain the importance of meeting expectations when valuations are already stretched. The strategists also discussed the merits of the “subscription economy.”
Dave also added some commentary about Pepsi’s earnings report, suggesting that he was disappointed to see the beverage giant distance itself from the exciting new marijuana-infused CBD drinks. Finally, Ryan fielded a question about car parts manufacturer BorgWarner (
BWA - Free Report) .
Make sure to check out the episode to hear more!
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