U.S. markets faced a bearish week after snapping an eight-day gain streak. On Monday, the Dow Jones Industrial Average slipped by 177.31 points or 0.6% after Boeing slashed its 737 MAX jet production guidance. Last week, Boeing announced that it would be cutting production from 52 planes per month to 42 planes. Boeing news weighed in on Monday, causing a shaky start to the week. On Tuesday, markets continued to slip after the U.S. threatened to levy tariffs on many European goods. Rober Lighthizer, U.S. Trade Representative, said that the Trump administration would wait for the World Trade Organization’s clearance to implement the duties. Trump also tweeted early on Tuesday morning that the EU has taken advantage of the U.S., also mentioning that it will soon stop. The threat is in retaliation against European companies’ subsidies for aircraft manufacturers such as Airbus SE. The tension with the European Union comes shortly after the U.S. and China were close to finalizing a deal and potentially ending their ongoing trade war. Markets remained relatively flat on Wednesday despite the Federal Reserve’s March meeting as well as policy update by the European Central Bank. The Fed signaled that the central bank still saw growth even though it conceded global growth concerns and ultimately decided to push off rate hikes this year. Now, investors and analysts are shifting their focus towards the upcoming earnings season. New Age Beverage Corporation (NASDAQ:NBEV), American Airlines Group Inc. (NASDAQ:AAL), Delta Air Lines, Inc. (NYSE:DAL), Bed Bath & Beyond Inc. (NASDAQ:BBBY), Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT)
“…the U.S. earnings’ reports will be the next catalyst that will either push the indices higher, in case of continued corporate profitability, or send equities lower if investors start seeing further evidence of a domestic slowdown,” said Konstantinos Anthis, Head of Research at ADSS, the Abu Dhabi based financial services firm, in a note to clients, according to MarketWatch. “The boost provided to equity markets from the shift in central banks seems to be exhausted with the S&P 500 standing 1.7% away from an all-time high. Investors hoping for an interest rate cut may not see one coming any time soon, suggesting that they shouldn’t continue betting on monetary policy to push equities further.”
New Age Beverage Corporation (NASDAQ:NBEV) shares surged on Monday after the Company had announced that it will begin distribution expansion with Walmart. New Age shares closed 38.56% higher on Monday. New Age acquired the Marley brand back in 2017. The Company restructured the brand into an organic mate and cold brew in 2018, which led to a 70% increase in demand for the product brand. Now, the brand is beginning distribution shipments in Walmarts across the U.S. Marley brands is also planning on launching its Marley Mellow Mood Relaxation Drinks and its CBD version globally by 2019. Marley’s portfolio includes other drinks such as its Marley Mate, which comes in three flavors: three flavors, Be Jammin’ Berry, Ya Mon Mint, and Jamaican Me Mango.
American Airlines Group Inc. (NASDAQ:AAL) slashed its guidance for its upcoming first quarter on Tuesday due to the continued grounding of Boeing 737 MAX jets. American Airlines’ shares slipped by 3.3% following the revised outlook. The Company said that first-quarter revenue per seat mile, a major industry performance measure, is expected to be flat to up to 1% compared to its previous guidance of flat to up to 2%. American Airlines also expects to pay an average of between USD 2.02 and USD 2.07 per gallon of mainline jet fuel, compared to previous estimates of USD 1.97 to USD 2.02.
Delta Air Lines, Inc. (NYSE:DAL) announced its first quarter financial results. The Company reported-better than-expected revenue and earnings, which sent shares 2% higher on Wednesday’s trading hours. For the first quarter, Delta reported earnings of USD 96 cents per share on revenue of USD 10.47 Billion. Refinitiv analysts polled for earnings of USD 90 cents per share on revenue of USD 10.42 Billion for the quarter. Delta said that revenue was driven by improvements across its business units such as an 8% increase in premium product ticket revenue and double-digit percentage increases across loyalty, maintenance, Repair, and Overhaul revenue. The improvements across Delta’s segment also led to a 2.4% increase year-over-year in revenue per available seat mile in the quarter. As for Delta’s June 2019 quarter, the airline expects earnings between USD 2.05 to USD 2.35 per share. Delta expects total revenue to grow between 6% to 8% year-over-year.
Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported its fourth quarter financial results after the market close on Wednesday. The home retailer beat earnings estimates but missed revenue reports, which sent shares 11% lower on Thursday morning. The Company reported earnings of USD 1.20 per share on revenue of USD 3.31 Billion. Analysts expected the Company to report earnings of USD 1.11 per share on revenue of USD 3.33 Billion. Continuing forward, Bed Bath & Beyond is strategically planning in order to drive revenue growth. The Company noted in its earnings release that it will plan to align product assortment and improve customer experience and engagement. As for the short-term growth plan, Bed Bath & Beyond will drive financial growth through modifications in pricing algorithms, further optimization of coupon strategy, and supply chain improvements.
Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) announced on Thursday additional supportive data from its pivotal Phase 3 REGENERATE study of obeticholic acid in patients with liver fibrosis due to nonalcoholic steatohepatitis (NASH). The news sent Intercept shares lower by 11.83% early Thursday morning after investors and analysts noted that other larger biotechnology companies are also developing NASH drugs. Analysts noted that the heavy competition to develop NASH drugs could overshadow Intercept’s clinical trials. In Intercept’s clinical trial, the biopharmaceutical company reported that the study met its primary endpoint, with no worsening of NASH in 23.1% of the patients compared to 11.9% of the placebo patients in an 18-month interim analysis. The U.S. Food Drug and Administration required two primary end points to be met, but Intercept only achieved one of the two.
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