“The US is no longer the world’s leading manufacturer, so market attention is likely to focus on its remaining role as the world’s leading consumer. This data will be messy,” Paul Donovan, chief economist at UBS Global Wealth Management, told clients.
But the company now forecasts earnings per share of $6.20 to $6.35, after previously estimating an increase in the “high single-digits.” Shares are down 1% in premarket trading.
Home Depot’s stock is also down premarket, tumbling more than 3% after the company indicated that the home improvement boom that lifted its business during the pandemic may be waning.
The company said that comparable sales rose by 4.5%. That’s much slower growth than this time last year, when the metric jumped by more than 20%.
US retail sales for July, due later Tuesday, could also be cause for concern. Economists polled by Reuters predict that retail sales fell 0.2% after rising 0.6% in June.
This could help: The spending picture is clearly murky. But analysts at Cowen are touting at least one bright spot. They point out that beginning in July, an estimated 39 million US households started receiving monthly bank deposits — the result of the enhanced child tax credit that was part of President Joe Biden’s $1.9 trillion stimulus package.
“A huge policy change, this is universal basic income for low-middle income parents,” Cowen’s team said in a recent research report. The investment bank thinks the extra cash could help boost spending.
China tech stocks plunge again as regulators unveil new rules
Fresh regulatory action targeting private businesses in China is jolting tech stocks in Asia again.
The latest: China’s biggest tech companies lost more than $50 billion in market value Tuesday after Beijing proposed sweeping new rules to further curb anti-competitive behavior among big internet firms, my CNN Business colleague Laura He reports.
The State Administration for Market Regulation, which has spearheaded the government’s antitrust campaign against Big Tech, said it would forbid business operators from faking stats or information about their orders, sales and user reviews to mislead customers. They would also be banned from fabricating consumer views to hurt rivals’ reputations.
Other practices targeted include leveraging data or algorithms to redirect web traffic from competitors, and creating obstacles that would prevent customers from installing or running rival services.
The regulator also proposed banning a practice known as “choosing one from two,” in which companies make exclusive agreements with merchants that prevent them from selling on rival e-commerce platforms. SAMR investigated Alibaba over such issues earlier this year, eventually slapping the company with a record $2.8 billion penalty.
SAMR, which was established in 2018, has dramatically stepped up antitrust scrutiny of the country’s tech champions since late last year, when President Xi Jinping called for the reining in of the “disorderly expansion” of private capital.
Afghanistan faces an uncertain future. So does its economy
See here: As of 2020, an estimated 90% of Afghans were living below the government-determined poverty level of $2 per day, according to a report from the Congressional Research Service published in June.
An escalating humanitarian crisis and instability as the Taliban works to consolidate power are only expected to make matters worse.
“The country is deeply divided with numerous factions opposed to Taliban control, which leaves civil war and further regional instability a distinct possibility,” risk consultancy Verisk Maplecroft said in a report published this week.
Vast supplies of iron, copper and gold are spread across the country. There is also lithium, a critical mineral in the batteries that power electric vehicles.
Getting these resources out of the ground isn’t easy, however. RK Equity partner Howard Klein, who advises investors on lithium, said developers will want to avoid an increasingly hostile environment. There’s speculation that China, which dominates the mining of rare earth minerals, could try to swoop in, but Klein thinks Beijing is more likely to prioritize other regions first.
Up next
US retail sales for July post at 8:30 a.m. ET.
Also today: Fed Chair Jerome Powell participates in a town hall at 1:30 p.m. ET.