US equity markets rebounded on turn around Tuesday. US markets tumbled overnight but rebounded into the open. Technology shares led the markets higher pushing the Nasdaq up more than 1%. Crude oil prices were flat on the day, but energy shares rebounded. Retailers were on the defensive following disappointing same store comparisons. All sectors were higher, led by Energy and Technology, Consumer Staples were the worst performers.
Sales at Kohls and J.C. Penny Drop
Sales at Kohl’s Corp. and J.C. Penney Co slid during the latest quarter as the retailers experienced a slower start to the year. Kohl’s comparable sales fell 3.4%, while same-store sales at Penney dropped 5.5%. Both retailers missed analysts’ expectations for the quarter, which ended on May 4. Their results are in contrast to other chains that reported strong sales last week, including Walmart Inc. and Macy’s Inc. Home Depot Inc. posted a rise in quarterly same-store sales. But the 2.5% increase was slower than expected. Kohl’s said its sales shortfall was due to unusually cool spring weather as well as more competitive pricing and promotions by competitors. Penney was also hurt by its decision in February to stop selling major appliances. Total revenue at Penney fell 4.3% to $2.56 billion. Its net loss widened to $154 million from a loss of $78 million a year ago.
Semi’s Rebound as Huawei Accuses US of Bullying
Chip stocks rebounded on Tuesday, as the US said they would provide a temporary reprieve from US companies selling to Huawei. Huawei Technologies denounced US actions against the company as bullying and implored European governments to resist American pressure to follow suit in a bid to safeguard one of its most lucrative markets. The telecom equipment giant also took its counteroffensive directly to European consumers Tuesday, launching a marquee phone, the Honor 20, the latest device in a lower-priced Huawei-owned line aimed at younger users.
Additionally, the US has sharply slowed approvals for the nation’s semiconductor companies to hire Chinese nationals for advanced engineering jobs. The disruption, which started last year, has affected hundreds of jobs across the industry at companies including most of the major Semi-conductor companies. It is significant in part because Chinese nationals account for a large share of non-US citizens hired for such technical roles, where the talent supply domestically is often scarce. The slowdown in approvals also shows the conundrum U.S. companies face in navigating the U.S. stance toward China on technology: Decisions aimed at protecting U.S. competitiveness in one way could hamper it in another.
Existing Home Sales Drop
Existing homes sales in the US fell in April as rising mortgage rates generated headwinds for sellers. According to the National Association of Realtors US home sales fell 0.4% in April. Sales are now down 4.4% year over year. March was a blockbuster month for sales as mortgage rates decline more than 0.25%.
This article was originally posted on FX Empire
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