Wednesday, August 1, 2018
What to watch today
On Wednesday, investors will have strong earnings news from Apple (AAPL) to help markets start August on the right foot, as the world’s largest company by market cap reported earnings and revenue that topped expectations after the close on Tuesday. In after-hours trading on Tuesday, Apple shares were up as much as 3.5% to north of $197 per share, an all-time high for the stock.
Wednesday’s biggest earnings report will also come after the market close, when Tesla (TSLA) is set to report results for the second quarter. This report comes after what has been a busy few months for the company. In late June, Tesla hit its much-publicized target of producing 5,000 Model 3 sedans, though CEO Elon Musk’s behavior on the company’s last earnings call and on Twitter since then has garnered more headlines than the company’s actual performance.
And on the economic data side, the Federal Reserve’s latest monetary policy announcement, due out at 2:00 p.m. ET, will be the highlight. No changes are expected to the Fed’s current policy, which pegs its benchmark interest rate target range at 1.75%-2%, and Fed Chair Jay Powell will not take questions after the announcement. The Fed is expected to raise rates at its next meeting in September.
US plans higher tariffs on Chinese imports: The Trump administration will propose raising to 25% its planned 10% tariffs on $200 billion in Chinese imports, a move that would ratchet up pressure on Beijing to return to the negotiating table, three people familiar with the internal deliberations said. [Bloomberg]
Tesla plans to invest $5 billion building factory in China: Tesla Inc. (TSLA) is planning to invest $5 billion to build a factory in China, Bloomberg reported on Wednesday, citing a source. [Reuters]
Price of Pampers, Charmin is going up thanks to P&G’s shrinking profits: The cost of Pampers diapers, Bounty paper towels, Charmin toilet paper and Puffs tissues are going up as parent company Procter & Gamble’s (PG) profit margins get squeezed between rising competition and increased costs. U.S. families can thank higher commodity prices, shipping expenses and foreign exchange rates for the price hikes. [CNBC]
Third Point seeks allies to put pressure on Campbell Soup: Activist hedge fund Third Point is meeting with some of Campbell Soup Co.’s (CPB) largest shareholders to seek support for changes at the U.S. consumer company, people familiar with the matter said. The meetings come after Campbell Soup Chief Executive Denise Morrison unexpectedly stepped down in May, after the company issued a bleak forecast for the year and said it would embark on a review of its many brands. [Reuters]
Berkshire lends to owner of former Sears properties: Billionaire Warren Buffett’s Berkshire Hathaway Inc. (BRK-A, BRK-B) is loaning up to $2 billion to Seritage Growth Properties (SRG), a New York-based real estate investment trust that owns some of what used to be some of Sears Holdings Corp.’s (SHLD) best real estate. [Reuters]
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