The market went on a bit of a rollercoaster ride Wednesday. News that high level conversations with China may begin soon sparked a morning rally. But the exuberance wore off later in the day, with markets finishing relatively flat. Weighing heavily on the Dow was 3M (MMM). The CFO, speaking at an investor conference, complained of rising input costs and the stock began to fall. The stock finished the day down over 2%. Apple, announcing its new lineup of phones, did not spark a rally of enthusiasm, and also finished down over 1%. New tariffs on China, which many thought might be announced this week, appear to be delayed, as the government is focusing on Florence and what response may be necessary as the monster storm hits the Carolinas.
Thursday morning Kroger (KR) will report earnings. The $25B company gapped up and has continued to run into this latest release. In order to remain competitive the company has been on a buying and partnering spree to introduce meal kits, grocery pickup at your car, and online ordering. The conference call should provide an interesting update on how the company is innovating and where management sees their progress. Brady Corp. (BRC) will also announce earnings on Thursday. The identification and workplace safety company has been expanding margins, but growth has remained relatively flat. Analysts would like to hear where growth is going to come from when margin expansion runs its course.
The economic calendar on Thursday brings CPI and jobless claims. Following the 3M announcement CPI may be of more concern than was thought earlier in the week. Economists are expecting a moderate month-over-month rise of .3%. Friday the action picks up as we get retail sales, import export prices, industrial production, business inventories and consumer sentiment. Industrial production is expected to bounce back after a somewhat disturbing July number. August is projected to increase .4%, more in line with what the economy appears to be demanding.
The second full week of September will close out with earnings from Dave and Buster’s (PLAY) and MAM Software Group (MAM). Dave and Buster’s should provide an update on how its new store opening plan is coming along. The stock has been solidly to the upside this year. PLAY jumped substantially after its last earnings report, sold off, and is now back to those post earnings levels. MAM, the micro-cap company that provides software to aftermarket automotive suppliers, last quarter reported stable growth and a strengthening balance sheet. The company is transitioning to a SaaS model, and analysts will would like to hear the SaaS business continued at, or even outpaced, the 33% growth provided last quarter.
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