Morning Market Briefing – David Russell 8/28/2018

Don’s Notebook August 28, 2018

International trade was a big plus for second-quarter GDP making for a difficult comparison for this quarter. But inventories were a big minus in the second quarter making for an easy comparison now. Initial third-quarter inputs for both GDP components are today’s focus.

Market Notes:
• Stocks put in a strong day yesterday on news that the US and Mexico have finally reached an agreement on trade.
• The deal includes greater U.S. content in domestic autos and greater rights and pay for Mexican workers that would discourage U.S. automakers from moving production south. The deal is under the NAFTA agreement and still requires acceptance from Canada.
• Over the weekend it was hinted that an announcement was likely to come on Monday. And stocks were more than ready to rally on the news.
• Investors this morning get a fresh read on home prices as the S&P/Case-Shiller report for June is released at 9 a.m. ET.
• At 10 a.m. ET, the Conference Board releases its August Consumer Confidence Index.
Overnight Trade Notes:
• In Asia, the indexes closed mixed at the end of the day’s trading, with the Hang Seng having had the greatest change, up by 0.28%.
• European indexes are moving upwards, led by the CAC 40, up by 0.30%. In the Americas, the indexes closed higher at end of trading, with the Bovespa in Brazil having made the greatest gains, by 2.19%.
• U.S. stock futures were modestly higher this morning after another set of record closing highs for the S&P 500, Nasdaq and Russell 2000.
• The Dow has not yet joined the party but did close at its highest level since February. The Dow was about 2 percent away from its Jan. 26 record.

Earnings Notes:
Retailers are back in the earnings spotlight this morning, with quarterly numbers from Best Buy (BBY), Tiffany (TIF) and DSW (DSW). Box (BOX), H&R Block (HRB), Hewlett Packard Enterprise (HPE), and Shoe Carnival (SCVL) are scheduled to release earnings after today’s closing bell.
• DSW climbed nearly 20% after an across-the-board quarterly beat and rosy full-year guidance
• Best Buy shares tumbled in the premarket even though the electronics retailer reported second-quarter earnings and sales that topped analysts’ expectations.
• Tiffany topped quarterly estimates for profit and revenue and raised its full-year profit forecast. The upscale retailer sold more jewelry in China and the Americas.