Stocks ended Tuesday’s trading session lower in a chopping day of trading following a report that the U.S. and China are looking to delay tariffs set to go into effect Sunday.
Here’s how the markets settled at the end of regular trading Tuesday:
S&P 500 (^GSPC): -0.11%, or 3.44 points
Dow (^DJI): -0.10%, or 27.88 points
Nasdaq (^IXIC): -0.07%, or 5.64 points
Crude oil (CL=F): +0.51% to $59.32 per barrel
Gold (GC=F): +0.27% to $1,468.90 per ounce
The Wall Street Journal reported that the U.S. and China are working to delay the fresh round of U.S. tariffs scheduled to take effect Sunday. According to officials on both sides, the U.S. and China are hinting that trade negotiations could extend past the Dec. 15, as they work to get Beijing to commit to Trump’s agricultural purchase terms. The biggest setback to negotiations thus far has focused around agricultural purchases. The U.S. demanded that China commit to buying American soybeans, poultry, among other agricultural products.
An earlier report from the South China Morning Post said that a U.S.-China trade deal was unlikely to happen this week as the U.S. works aggressively towards passing the U.S.-Mexico-Canada Agreement (USMCA). Tuesday, House Democrats agreed to support the USMCA. The new deal will replace NAFTA and is seen as a big victory for the Trump administration. President Trump tweeting earlier:
America’s great USMCA Trade Bill is looking good. It will be the best and most important trade deal ever made by the USA. Good for everybody - Farmers, Manufacturers, Energy, Unions - tremendous support. Importantly, we will finally end our Country’s worst Trade Deal, NAFTA!— Donald J. Trump (@realDonaldTrump) December 10, 2019
Meanwhile, market watchers will also be closely monitoring the Federal Open Market Committee’s (FOMC) two-day policy-setting meeting which kicks off Tuesday. After slashing short-term interest rates for the third consecutive time this year, economists broadly anticipate that the central bank keep rates steady. At the conclusion of the meeting on Wednesday, the committee will release an updated dot plot, policy statement, and economic projections. Fed Chair Jay Powell will also deliver his last press conference of this year.
STOCKS: Stitch Fix soars, Chewy rises on earnings
Stitch Fix (SFIX) shares soared 5% after reporting better-than-expected adjusted EBITDA and revenue during its fiscal first quarter. The subscription clothing company reported Q1 adjusted EBITDA of $5.13 million and net revenue of $444.8 million. Stitch Fix reported that active clients jumped 17% to 3.4 million during the quarter. The company also gave a profit forecast that beat Wall Street estimates. “We see potential acceleration in revenue growth and net client adds as well as ongoing benefits from direct-buy functionality to drive ARPU growth and client retention as key positives for SFIX,” RBC analyst Mark Mahaney said in a note Monday. “We continue to believe that the Direct-Buy functionality could be a game-changer.”
Online pet retailer Chewy (CHWY) stock rose after the company reported an adjusted EBITDA loss that was narrower-than-expectations and revenue that beat estimates. Chewy reported 12.7 million active customers during Q3, which was shy of Wall Street’s 12.8 million estimate. The company expects Q4 net sales between $1.33 billion to $1.35 billion. Analysts were predicting $1.32 billion sales guidance for Q4. Chewy investors are bracing for volatility in the stock with the lock-up expiring Wednesday. Early Chewy investors and insiders will be able to sell their shares for the first time since the company went public on June 14.
“We maintain our positive bias on the stock with conviction in CHWY’s faster-than-industry growth and meaningful profit margin ramp,” Credit Suisse wrote in a note Monday. “With its shares off 31% since its June 14th IPO closing price of $35 (vs. S&P +8.6%), CHWY’s shares should regain momentum on the latest evidence of continued robust customer and sales growth.”
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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