Five Below (FIVE)

Five Below (FIVE) – High Five!  – The discount retailer is trading significantly higher at record highs pre-market after soundly beating quarterly estimates by $0.04 a share.  Same Store Sales increased by 2.7% to see a 23% jump in revenue overall with a rosy outlook also conveyed. The positive move was somewhat surprising considering a rapid decline from competitors in the space like Dollar Tree (DLTR) in recent days. 

Coke (KO)

Coke (KO) – Coffee Break! – The legendary beverage maker has agreed in earnest to purchase British coffee maker, Costa for a $5.1 Billion price tag. The chain has over 4K outlets as Coke looks to further diversify as trends continue to diminish over their core product line. Costa’s popular Georgia brand is also distributed widely throughout Asia as the battle of the brew continues. Shares of KO are trading modestly higher pre-market with new rival Starbucks (SBUX) down nearly 2% off the initial reaction. 

Domestic energy companies

Domestic energy companies collectively saw 9 rigs taken off line last week which was the largest weekly reduction in over two years as concerns around over-supply begin to set in despite a larger than expected draw last Wednesday. Crude Futures (/CL) are essentially flat just below the $69 a barrel mark with the heaviest driving season quickly coming to an end. The 10 year Treasury has dropped near the 2.815% mark this morning with general applauds surrounding FOMC Powell’s comments out of Jackson Hole last week in a call to gradually reduce rates. There have now been seven rate hikes completed since the financial crisis with two of those occurring just this year. Analysts believe we will see the same number by year’s end should the market continue at the current pace. 

S&P 500 (SPX) 8/24

The S&P 500 (SPX) moved lower as the U.S. and China engaged in a second day of trade talks.  $16 billion of tariffs were put in place early yesterday on a wide ranging list of items, spanning Chinese machinery and chemicals to U.S. engines and fish meal.   Robust corporate earnings and strong economic numbers have helped the S&P 500 rise more than 5% since the end of June, putting it on pace for its best three month stretch of the year.   According to analysts, tariffs have not had a severe negative effect on corporate profits, so far.  Minutes from the latest Fed meeting show that trade tensions have risen to the top of the central bank’s list of concerns.  

U.S. crude oil futures 8/22

U.S. crude oil futures (/CL) are up nearly 1.8%, and are on track to make their fifth consecutive gain as a drop in U.S. oil inventories and a sliding dollar have helped propel oil to trade near $67 a barrel.    Gold (/GC) has also benefited from the weakening dollar and increasing political uncertainty.  Gold futures are up 0.4% this morning, and are trading near $1205 per troy ounce.    Existing Home Sales and the FOMC minutes will be the highlight of today’s economic reports.  Investors will be looking for clues in the minutes for direction on interest rate policy going forward.  As of this writing,  S&P 500 futures (/ES) are 0.2% lower near 2857 and 30yr. Treasury bonds (/ZB) are 0.3% higher near  145’19.