Retailer Earnings on Tap for Investors
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How did U.S. stocks perform this week and which indexes moved the most?
With your money briefing, I'm Charlie Turner in New York for The Wall Street Journal. U.S. stocks dropped Friday as oil prices continued to decline. The Dow Jones Industrials fell 201 points to 25,989. The Nasdaq Composite fell 124 points, and the S&P 500 lost 25. But the midweek bounce the markets enjoyed landed them in the green for the week. The Dow and S&P both added more than 2 percent, and the Nasdaq rose 7 tenths percent. Jessica Menton is markets reporter for The Wall Street Journal.
Why did oil's recent decline worry investors despite lower prices for consumers?
She joins us in our studio. Jessica, oil prices landed in a bear market this week, down at least 20 percent from a recent high. Prices are low, which should be a positive for consumers, but U.S. supplies hit a five-month high, which is, I guess, seen as bad for the global economy. So is this, as far as oil is concerned, a glass-half-empty scenario?
It's interesting that you say that because there are seasonality factors that come into energy. So say in the summertime, most people are on vacation with their families. They're driving more. But then when you get into, say, September, October, November, there's not as much driving. People might not be taking as many vacations and flying and things like that.
How did comments about China and trade sensitivity affect market sectors?
But say we get into Thanksgiving and Christmas, people are. So it was interesting talking to some analysts about that and sort of tying into that volatility. So they think... Obviously, we've seen a lot of movements, especially with the Iran sanctions earlier this week. That was the second round. So there were expectations to see gyrations, but they think things could potentially level out here in a couple of weeks once those seasonality factors end up coming into play.
Were there also worries Friday about China after some rather belligerent comments from the White House?
It was interesting around midday earlier, we had already had those movements coming in following Thursday's losses in energy. But then it seemed more broadly after those comments about China. And it's sort of brought down a lot of those trade sensitive sectors like materials, industrials.
What did the midterm election outcome and Fed meeting mean for markets?
And even technology, because they do have so much exposure to China, especially when you think about the big FANG names, the tech names. When you think about those sort of tech products that have the components that go into them, they do have exposure overseas. So that was a big part of the driver heading into the weekend of those sectors.
And we should say the comments came from Peter Navarro, who is President Trump's trade advisor. He sort of criticized China about the progress of trade talks or the lack of progress of trade talks. The markets really got a lift after the midterm elections led to a divided Congress. It seems like a one-day rally, though.
Now that we're at the end of the week, it seems like so far ago that that happened. And I think the reason is because things came in as expected. People were going in wondering, OK, are the polls signaling us in the correct outcome? And it ended up coming out. And I think that's why we did see that's up there.
Which retailer earnings and retail-sales reports should investors watch before the holidays?
And to mention, this is the second week in a row. that all three major indexes ended higher, and that's following October's volatility. So it's going to be interesting to see going forward in November how stocks continue to perform, especially with the retailers coming up in the next couple of weeks like Walmart, Target, Macy's. It's going to be very crucial, especially when they're giving their outlooks ahead of Black Friday, Cyber Monday, things like that.
Jessica, the markets fell Thursday after the Fed held rates steady but said the economy was healthy. That signaled another rate hike was on the way in December. I thought that this was already priced into the markets. It seems like stocks dropped anyway.
It was expected that they weren't going to raise rates at that meeting, but they were going to in December. And then there's obviously that outlook, what is going to happen in 2019? I talked to a few economists this week, and as they were parsing through the statement, there were some clues that were a bit dovish, meaning they might not be as aggressive next year as far as the rate hikes are concerned because of certain business investment just didn't seem to be quite as strong there.
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Chapters
6 chapters
1
How did U.S. stocks perform this week and which indexes moved the most?
0:05–0:36
2
Why did oil's recent decline worry investors despite lower prices for consumers?
0:36–1:14
3
How did comments about China and trade sensitivity affect market sectors?
1:14–2:05
4
What did the midterm election outcome and Fed meeting mean for markets?
2:05–3:04
5
Which retailer earnings and retail-sales reports should investors watch before the holidays?
3:04–4:38
6
What other economic data and corporate earnings are on the week's calendar?
4:38–6:34
Speakers
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