What can possibly beat the firing of a mini bazooka by a panic-stricken Chinese leadership? The struggling Middle Kingdom surprised everyone with a dose of monetary stimulus and a promise of more fiscal giveaways. The economic situation in China could be a lot worse than the official government statistics might suggest.
The shock move by China comes ahead of its Golden Week when its markets shut down for seven days. The measures could provide just enough encouragement for the country’s long-suffering citizens to go out, spend and forget about depressed house prices.
So, now that the world’s two largest economies have seemingly embarked on a money-easing cycle, attention turns to the US non-farm payroll numbers (NFP). A strong NFP on Friday could put a pause on further cuts in the Fed fund rate this year. But there will a whole bevy of Fed officials’ speeches including an important one from Fed chair J Powell that could keep the market guessing.
On the corporate front
Carnival Corp (NYSE: CCL) could provide some important pointers for the health of the travel and leisure industry. In June, the cruise-ship operator raised its guidance for the third quarter and the full year, after registering record second-quarter adjusted earnings. It said this was based on continued strong demand trends.
There are huge pressures on the shoulders of the new CEO at Nike (NYSE: NKE). Veteran Nike employee Elliott Hill will probably have to announce a drop in both revenue and earnings in the first quarter. But investors will be keen to hear what the marketing guru intends to do differently to revive the fortunes of one of the world’s leading sports brands.
Conagra Brands (NYSE: CAG) warned in July that full-year organic revenue could be flat to down 1.5%. The owner of Birds Eye processed foods said consumers will remain challenged in 2025. However, it said that it would gradually transition towards a more normalised operating environment as consumers adapt.
Wine, beer and spirits outfit Constellation Brands (NYSE: STZ) said at the time of its first-quarter results in July that it expects full-year net sales to grow between 6% and 7%. The company behind Corona said that beer sales rose strongly but spirits saw a decline as a result of challenging conditions.
Levi Strauss & Co (NYSE: LEVI) warned in June that consumers have been generally cautious and aren’t spending a lot on discretionary items. The denim maker said it is transitioning its distribution network from one that sold primarily to wholesalers to one that will be more focussed on selling directly to consumers.
Japanese mayonnaise maker Kewpie (NYSE: KWPCF) said in July that it expects full-year earnings to grow 57% after profit more than doubled in the first half. The food producer said price increases for some products and a slower rise in material costs had boosted the bottom line. Yum!
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Disclosure: David owns shares in Nike.
