Us stocks rose in early trading on Tuesday, expanding their early gains as the Turkish lira rebounded from historic lows, boosting investor confidence.
The Dow Jones Industrial average rose 101.42 points, or 0.40%, to 25289.12, while the S & P 500 rose 15.17 points, or 0.54%, to 2837.10, and both benchmark indices are expected to end the previous four consecutive declines. The Nasdaq composite index rose 37.76 points, or 0.48%, to 7857.47.
Market drivers:
The energy sector was the best performer on Wall Street, rising nearly 1 per cent as WTI futures rose 1.6 per cent. In addition, technology stocks also gave a boost to the overall stock market, where the shares of Apple Inc (NASDAQ:AAPL) and online retail giant Amazon.Com Inc (NASDAQ:AMZN) rose.
The Home Depot Inc reported second-quarter earnings of $3.05 a share, beating Wall Street analysts' average expectations of $2.84 and revenue also beating expectations. In addition, The Home Depot Inc's global and US same-store sales also exceeded expectations and raised its full-year performance outlook. Home Depot shares rose before trading, but fell about 1 per cent in early trading. The Dow was the latest company to beat expectations for quarterly earnings during the second-quarter earnings season for strong U. S. companies.
As of Tuesday morning local time, 76.84% of the S & P 500 companies that had reported second-quarter results beat the average expectations of Wall Street analysts, with earnings up more than 24% from a year earlier, according to FactSet, a financial information provider.
Turkish crisis:
The Turkish lira rose more than 4 per cent against the dollar to 6.56 lira after hitting an all-time low of 7.24 lira in trading on Monday. The Turkish lira has been under pressure recently as market watchers worry about President Recep Tayyip Erdogan's control of the country's economy and US President Donald Trump said last week that he supported doubling US metal tariffs on Turkey.
At the same time, Turkey is also facing economic chaos, and the country's inflation rate has risen sharply recently. Last month, Turkish inflation hit 16 per cent, well above the central bank's target of 5 per cent. The financial crisis has sparked concerns among investors that the crisis could spread across Europe.
Emerging market stocks followed the Turkish lira on Tuesday, with an emerging markets exchange traded fund (iShares MSCI Emerging Markets ETF) rising about 0.5 per cent, which is expected to end the previous four consecutive declines. Turkish stocks rose 7 per cent, leading emerging market gains, while Brazil, Mexico and South Korea all rose at least 1 per cent.
Analyst comments:
"taking into account the better-than-expected sales and earnings performance and their growth rate in 2018 (second quarter), there are not many negative factors for the overall earnings performance at present. "said Nick Raich, chief executive of The Earnings Scout.
Economic data:
The National Federation of Independent Enterprises (NFIB) reported that the NFIB small business optimism index rose 0.7 points to 107.9 in July, the second highest level on record and only slightly below the previous high reached in 1983.
The import price index of the United States in July is 0% month-on-month and is expected to be 0%. The previous value was revised from-0.4% to-0.1%. The US import price index (except gasoline) was-0.1% month-on-month in July and is expected to be 0.1%. The previous value was revised from-0.3% to-0.4%. The US import price index for July is 4.8% year-on-year and is expected to be 4.5%. The previous value was revised from 4.3% to 4.7%.
By 11:00 eastern time on Tuesday (11:00 Beijing time on Tuesday), the second-quarter US household debt report will be released.
China-listed stocks:
HUYA Inc. Live fell 13.45% in early trading, JOYY Inc's era fell 15.04%, and Vipshop Holdings Limited fell 14.48% after all three US-listed Chinese companies reported second-quarter results after Monday's trading.
HUYA Inc. Live (NYSE: HUYA) released its results for the second quarter of 2018 after the US stock market closed on August 13, 2018 (early August 14, Beijing time). According to the financial report, HUYA Inc. continued strong revenue growth in the second quarter, doubling over the same period last year, with an increase of 125.1%, an all-time high. HUYA Inc. posted a net loss of 2.1254 billion yuan ($321.2 million) in the second quarter, compared with a net loss of 15 million yuan attributed to HUYA Inc. in the same period in 2017. The net profit not in accordance with the US general accounting standards reached 105.4 million yuan (US $15.9 million), which has been profitable for three consecutive quarters.
JOYY Inc NASDAQ:YY released its unaudited results for the second quarter of 2018 for the second quarter ended June 30, 2018, after the US stock market closed on Monday. According to the report, the net income of the JOYY Inc era in the second quarter was 3.7732 billion yuan ($570.2 million), up 44.6 percent from 2.609 billion yuan in the same period last year, and a net loss of 136.9 million yuan ($20.7 million). Compared with net profit of 573.7 million yuan in the same period last year. In the JOYY Inc era, diluted earnings per share of American depositary receipts were 13.46 yuan ($2.03) in the second quarter, up 34.3% from 10.02 yuan a year earlier.
Vipshop Holdings Limited (NYSE:VIPS) released its unaudited results for the second quarter of 2018 for the second quarter ended June 30, 2018, after the US stock market closed on Monday. Vipshop Holdings Limited's total net income in the second quarter was 20.7 billion yuan ($3.1 billion), up 18.4% from 17.5 billion yuan in the same period last year, exceeding expectations, according to the report. Net profit attributable to the company's shareholders was 681.6 million yuan ($103 million), up 76.4 percent from 386.5 million yuan in the same period last year. Not in accordance with American general accounting standards, diluted earnings per share of American depositary receipts belonging to Vipshop Holdings Limited shareholders in the second quarter were 0.84 yuan (about 0.13 U.S. dollars), which fell short of expectations. by comparison, the diluted earnings per share of American depositary receipts belonging to Vipshop Holdings Limited shareholders in the same period last year was 1.09 yuan.
Sequoia Capital China is teaming up with China's state-owned capital venture capital fund and JD.com to raise up to 40 billion yuan ($5.81 billion) to set up a new investment fund, which will focus on investing in late-stage technology companies, according to Reuters.
NIO Inc. Automobile, a newly created car brand, officially submitted an IPO file to the US Securities Regulatory Commission under the stock symbol NIO. NIO Inc. plans to raise $1.8 billion this time, down from $2 billion previously rumored in the market, according to an IPO filing filed by NIO Inc. Motor, which was shown by the US Securities Regulatory Commission in the early hours of Aug. 14. Financial data show that NIO Inc. 's revenue in the first six months of this year was 45.991 million yuan, of which the income from car sales was 44.399 million yuan, with a net loss of 3.326 billion yuan. NIO Inc. 's cash flow is relatively abundant, with cash, cash equivalents and restricted cash totaling 4.48 billion yuan as of 2018.
Key US stocks:
Tesla, Inc., the US electric carmaker, set up a committee to assess a potential takeover offer and its shares fell more than 1 per cent in early trading, according to Bloomberg. Tesla, Inc. CEO Musk announced in a tweet that he was working with Goldman Sachs Group Group (Goldman Sachs Group) and private equity firm Silver Lake to promote the privatization of Tesla, Inc.. Earlier, he also said that Tesla, Inc. 's privatisation financing was being discussed with Saudi public investment funds and others. In a previous tweet, Mr Musk said that the privatisation of Tesla, Inc. meant "financing is guaranteed", but it did not begin at that time, he later explained that the tweet meant that he was confident that the deal would be struck, but the plan had not yet been finalized.
Tapestry (NYSE:TPR), the parent company, reported adjusted earnings per share of 60 cents in the fourth quarter, 3 cents higher than the average expected by Wall Street analysts, and revenue also exceeded expectations. Coach-branded same-store sales rose 2 per cent in the quarter, slightly below analysts' average expectations of 2.1 per cent for same-store sales under the Kate Spade brand, up 3 per cent and well below analysts' average expectations of 7.1 per cent. Affected by this, Tapestry shares rose nearly 11% in morning trading.
Data center company Switch earned 2 cents a share in the second quarter, below Wall Street analysts' average estimate of 4 cents, and revenue was slightly lower than expected. In addition, the company cut its full-year outlook because a number of deals were completed later than the company had expected. Switch shares tumbled nearly 26% in morning trading.
In the European and Asia-Pacific markets:
European stocks were mixed, with the European Stoxx 600 index rising 0.1%. By the close, the Prev index was down 0.18% at 2780 points, the Shenzhen Composite Index was down 0.68% at 8784 points, and the gem index was down 0.84% at 1518 points. The Nikkei 225 index closed up 2.28%.
In the oil market:
Oil prices soared by nearly 2%. WTI crude oil futures rose 1.6 percent to $68.26 a barrel. Brent crude futures rose 1.7% to $73.82 a barrel.
Other markets:
The dollar index rose 0.1% to 96.34. The euro fell 0.2% against the dollar to 1.1390. The pound / dollar rose 0.1% to 1.2774. The dollar / yen rose 0.1% to 110.86.
The price of gold rose slightly. Comex December gold futures rose 0.3 percent to $1203.1 an ounce. (nebula)