Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average ended higher Thursday after a wild session that saw shifts from pessimism over economic news turn to optimism about further Fed rate cuts.
- Constellation Brands (STZ - Get Report) shares fell after the beer, wine, and spirits company reported stronger-than-expected second-quarter earnings and lifted its full-year profit guidance, but took an $484 million loss from its holding in Canadian marijuana company Canopy Growth (CGC - Get Report) .
Wall Street Overview
"This is much worse than it looks, because the headline index tends to track the rate of growth of core retail sales, which recently has been very strong," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "The big and widening wedge between rate of sales growth and the ISM index presumably reflects fear of the impact of tariffs on consumer goods on retailers sales and margins, and worries in the non-retail sector that peoples' broad spending power will be reduced by the need to devote more of their income to paying for tariffed goods."
Shepherdson added that back in the spring, "we thought that the president ultimately would not apply tariffs to consumer goods, on the grounds that most politicians would think it unwise to strip spending power from their core supporters -- tariffs disproportionately hurt people on lower incomes -- with an election in the offing."
"We were wrong, but the entirely predictable consequences are now coming to pass, even more quickly than we expected," he said.
Charlie Ripley, senior investment strategist for Allianz Investment Management, said that "essentially, this report is telling us that the uncertainty surrounding the global economy and the manufacturing sector in particular has started to spill over to the broader service sector economy."
"The weaker readings on both the manufacturing and non-manufacturing surveys are signaling that slower economic growth lies ahead and markets have responded with a knee-jerk reaction over the past few days," Ripley said. "However, with these data points only being survey-based measures to gauge the economy, investors will be looking for further evidence of economic weakness in the labor market, which makes tomorrow's report that much more important."
Much of the weakness in the manufacturing data from earlier in the week was linked to the ongoing trade conflict between the U.S. and China, but investors are now growing concerned that this could expand to include Europe after the WTO ruled Wednesday that Washington could counter illegal subsidies to planemaker Airbus (EADSY) with tariffs on $7.5 billion worth of goods including airplanes made by Boeing's (BA - Get Report) main rival, French wine, British whiskey and Italian cheese.
Tesla (TSLA - Get Report) fell 4.2% to $233.03 after the electric carmaker reported 97,000 deliveries for the third quarter. Wall Street analysts had expected around 98,000 deliveries for the quarter.
Bed Bath & Beyond (BBBY - Get Report) rose 2.7% to $10.29 after the home furnishings retailer posted weaker-than-forecast same-store sales over its fiscal second quarter, and trimmed its full-year profit guidance, amid its ongoing turnaround program.
Brent crude contracts were down 17 cents to $57.52 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were off 41 cents to $52.23 a barrel.
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