16Aug2018 Pre-Market Commentary: Wall Street Futures Rebound, DOW To Open 200 Points Higher, WTI Crude Prices Rose From 64 To The 65 Handle, US Homebuilding Rebounded Less Than Expected

Written by Gary

US equities point to a higher opening this morning (SPY +0.6%) on strong earnings and trade talk hopes.

Here is the current market situation from CNN Money
	European markets are higher today with shares in London leading the region. The FTSE 100 is up 0.73% while France’s CAC 40 is up 0.57% and Germany’s DAX is up 0.36%.

Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.

What Is Moving the Markets

Here are the headlines moving the markets.
	Walmart’s second-quarter comparable sales rise most in a decade, shares soar Walmart Inc on Thursday said its U.S. comparable sales grew the most in a decade and its e-commerce sales grew 40 percent, higher than 33 percent growth in the previous quarter, sending its shares up nearly 11 percent in premarket trade.
	Kroger begins tests of driverless grocery delivery in Arizona U.S. supermarket operator Kroger Co said it will start testing driverless grocery delivery on Thursday with technology partner Nuro at a single Fry’s Food Store in Scottsdale, Arizona.
	J.C. Penney same-store sales miss estimates, shares tumble J.C. Penney Co Inc on Thursday reported sales at established stores below analysts’ estimates as the department store chain discounted heavily to clear inventory, sending its shares down 15 percent.
	U.S. tariffs to stay on Turkey, Qatar offers Ankara aid The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a U.S. pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira.
	Turkish lira firms before finance minister’s presentation The Turkish lira strengthened more than 3 percent on Thursday before a presentation by Finance Minister Berat Albayrak to investors, shrugging off U.S. comments ruling out the removal of steel tariffs on Turkey even if it frees a U.S. pastor.
	Futures rebound on strong earnings, trade talk hopes U.S. stock index futures rose on Thursday, helped by upbeat earnings, a dip in the dollar and after China said it will hold trade talks with the United States later this month.
	Uber narrows loss but is a long way from finding profit Uber Technologies Inc said on Wednesday it narrowed its quarterly losses from a year earlier, although the ride-hailing company is still a long way from proving it can be profitable as it gears up to go public in 2019.
	China, U.S. to hold lower-level trade talks in late August China will hold a fresh round of trade talks with the United States in Washington later this month, Beijing said on Thursday, offering a glimmer of hope for progress in resolving a conflict that has set world financial markets on edge.
	Shares, emerging market currencies steady after fresh mauling Bruised world shares and emerging market currencies fought to regain their footing on Thursday, after China said it will hold trade talks with the United States later this month and Turkey’s lira continued its recovery run.
	JCPenney Crashes To Record Lows As Default Risk Soars JCPenney shares are down over 20% this morning in the pre-market… …trading below $2 for the first time in its almost 40 year history… …after posting a wider-than-expected quarterly loss and disappointing sales. The struggling department-store chain, which has been without a chief executive since May, also lowered its forecast for the year, and now expect a loss. Chairman Ronald W. Tysoe gave an update on the CEO search in the …
	China Crushes Yuan Bears As Cost To Short Yuan Soars Most Since 2016 One day after Turkey unleashed measures to crush Turkish Lira shorts, China did the same and on Thursday, the offshore Yuan tumbled by 0.7% from as low as 6.94 to 6.8825 – the biggest drop since July 25 – after the offshore Yuan’s 12 month forward points soared from 350 bps to 830bps, the biggest one-day move since January 2016 – sending the cost of short bets against the Yuan soaring, with the spike in CNH forward points making it riskier, and more expensive, to short the Yuan. Separately, CNH tomorrow-next forward points soared as much as 15.7 to 15, before paring the increase to 3 in an attempt to force stops by Yuan shorts. “Two reasons are supporting the yuan today: the restart of China-U.S. trade talks, and the widespread market rumor that some banks at Shanghai free-trade zone are not allowed to lend the yuan to offshore banks,” a move that could squeeze liquidity, said Scotiabank’s Gao Qi. “The yuan may stabilize at the current level or even strengthen in the near term, as sentiment improves on the trade front. Its fate in the longer-term hinges on the trade talks and Turkey.” A
	Walmart Soars 8% On Strongest Comps In 10 Years, Outlook Boost; Dow Futs Rise Walmart stock is soaring 8% in the premarket, pushing Dow futures even higher – WMT has a 2.4% weighting in the DJIA – after reporting earnings that smashed expectations and boosted guidance. The company reported Q2 EPS of $1.29, above the highest Wall Street estimate (consensus 1.22, range 1.17-1.28), on revenue of $128BN, also above the highest forecast (consensus $126BN, range $124.6BN-$127.5BN). The company reported U.S. comps sales ex-fuel up 4.5%, more than double the estimate of 2.2%, and the strongest Walmart U.S. comp. in more than 10 years, led by grocery, apparel, seasonal. Wal-Mart U.S. traffic was up 2.2% y/y, while the average ticket was up 2.3%. eCommerce contributed approximately 100 basis points to segment comp sales growth with strength in online grocery and eCommerce home delivery. Sam’s Club comps. ex-fuel rose 5.0%, est. +2.2% driven entirely by an increase in traffic (+6.7%), while the average ticket was down 1.7%. 2Q net sales at Walmart Intl rose 4.0% to $29.5BN. And while revenue and EPS were impressive, Q2 operating income declined 3.7% as cost of sales, and SG&A costs rose, most likely reflecting an increase in labor costs. At the same time, membershi …
	US Futures Surge, Yuan Jumps And Dollar Drops As China-US To Resume Trade Talks Heading into Thursday trading, global stocks were set for another downbeat session when China’s Ministry of Commerce broke news broke that – at the invitation of the US – China would send its Vice Commerce Minister, Wang Shouwen, to the U.S. for low-level trade talks in late August, the first official exchanges since earlier negotiations broke down two months ago. The Chinese delegation would meet with an American group led by David Malpass, under secretary for international affairs at the Treasury. The news – which the market immediately interpreted as an opportunity for an end in the trade war between the US and China – sparked a furious risk-on rally, which sent US futures, the offshore Yuan, and other risk assets surging, while the dollar and Treasuries slumped. Maybe the market got ahead of itself again because the upcoming talks will be at a relatively low level: “This will be ‘talks about trade talks,'” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.” Yet for some reason, despite several rou …
	Good Isn’t Good Enough at Macy’s The department store has solid earnings and raises guidance, but that isn’t enough for investors after a big stock run.
	July 2018 Sea Container Movements Slow Written by Steven Hansen The July year-over-year export counts were weaker than last month – and imports are now showing a declining trend line.
	Economic Report: Housing starts creep higher, but construction slows vs. a year ago Construction on new houses increased by less than 1% in July, reflecting a recent slowdown in building that’s likely tied to higher mortgage rates and growing shortages of skilled craftsmen. Housing starts edged up to an annual rate of 1.17 million.
	There’s an EpiPen shortage — and parents fear for their allergic kids Parents say it’s already hard to find an EpiPen for their allergic child to take to school.
	The Wall Street Journal: Tesla backs off solar panel deal with Panasonic The U.S. company won’t buy the entire output of the solar plant it jointly runs in Buffalo.