Retailer Earnings, Jobless Claims

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Aug. 29. The Bottom Line segment of today’s podcast starts at (4:01) and Stocks on the Contrarian Radar at (6:29) for listeners who want to skip ahead.

State of Play

Stocks dropped yesterday ahead of Nvidia (NVDA 0.00%↑), which beat estimates but apparently not by enough to impress the market as the stock has sold off overnight. As we look at our board of indicators for signs of direction at 0650, there is not an awful lot to go by:

• Stock index futures are pointing to modest gains, led by large caps. The Dow Industrial is up 0.5%. S&P 500 futures about 0.3% to the good, the same as Nasdaq;

• Commodities aren’t doing much. WTI crude oil is unchanged trading around $74.50/barrel. Copper also unchanged;

• Cryptos also blah. Bitcoin is changing hands around $59,600, unchanged;

• Bonds aren’t doing anything either. The 2-year yields 3.87% whilst the 10-year yields 3.83%. So just 4bps separate the 2- and 10-year yield curves from uninverting.

Today’s Known Events

There are some retailers reporting earnings today:

• Best Buy (BBY 0.00%↑) beat estimates and raised guidance and that stock is rallying in the pre-market, up 8% at the time of this writing;

• Dollar General (DG 0.00%↑) missed estimates and lowered outlook and that stock has called off a cliff as a result, down 18% in the pre-market at the time of this writing;

• Burlington Stores (BURL 0.00%↑) beat estimates and raised guidance and that stock is moving higher in the pre-market;

• Birkenstock (BIRK 0.00%↑) earnings appear to have disappointed investors a that stock is down double digit percent in the pre-market;

• American Eagle Outfitters (AEO 0.00%↑), Olli’s Bargain Outlet (OLLI 0.00%↑), and Campbell’s Soup (CPB 0.00%↑) are also due before the open at 0930;

• After the close we’ll hear from Lululemon (LULU 0.00%↑), Dell (DELL 0.00%↑), Ulta Beauty (ULTA 0.00%↑), Marvell Technology (MRVL 0.00%↑), Gap (GAP 0.00%↑), Autodesk (ADSK 0.00%↑), and others.

Initial jobless claims are out at 0830. The expectation this week is for 232,000 claims, identical to what was recorded last week and below the four-week average of 236,000. Continuing claims are expected to come in at 1.87 million, up a bit from the 1.863 million recorded last week.

We also get a second reading of second-quarter GDP at 0830 but that can be safely ignored seeing how it is likely to confirm what was in the first reading, which was 2.8% annualized growth.

Pending home sales are out at 1000. The expectation here is for an increase of 0.2% month-over-month, which is a pretty significant decline from the 4.8% recorded last month but there is likely a seasonal component here.