Plus, the U.S. and China hit another snag in negotiations, jobless claims jumped to their highest level in 5 months, and activist investors are going after Instructure.
Stocks edged just slightly lower to start Thursday with the Dow losing just 1 point. The S&P 500 traded just below the flatline, while the Nasdaq slipped 0.2%.
Trade talks between the U.S. and China have hit a snag over agricultural purchases, according to a report from The Wall Street Journal. President Donald Trump said last month that China had agreed to buy up to $50 billion of agricultural products from the U.S. annually, but China is wary of committing to a dollar amount in writing as part of the phase one trade agreement. Then today, China again called for the U.S. to roll back tariffs as part of the limited phase one deal, which Trump said last week he had not agree to. “The trade war was begun with adding tariffs, and should be ended by canceling these additional tariffs,” China’s Ministry of Commerce spokesperson, Gao Feng, said at a press conference. “This is an important condition for both sides to reach an agreement. If both sides reach a phase one agreement, the level of tariff rollback will fully reflect the importance of the phase one agreement.”
U.S. jobless claims jumped to a nearly 5-month high last week as the number of people who applied for jobless benefits spiked 14,000 to 225,000 in the seven days ended November 9, according to Labor Department data released this morning. Economists had estimated claims would total 215,000. The greater number of jobless claims could reflect seasonal adjustment irregularities in the data that can crop up during the holidays. “It is important to keep in mind that November is a tricky month for seasonal adjustment,” said Jefferies senior money market economist Thomas Simons. “There are two holidays during the month, and the floating nature of Thanksgiving makes it even more difficult to adjust for than a fixed-date holiday like Veteran’s Day. Claims may be volatile over the next several weeks, but we would not read too far into that.”
Shares of Walmart are up this morning after the big-box retailer delivered an earnings beat. The company reported earnings per share of $1.16, compared to analysts’ estimates for earnings per share of $1.09, on revenue of $127.99 billion. CEO Doug McMillon said that Walmart is “prepared for a good holiday season,” while adding that the company needs to do more to make progress on walmart.com. “We’re making progress on many fronts, but we need to do more and move faster, especially with our assortment including marketplace,” McMillon said in a statement. “Our strength is being driven by food, which is good, but we need even more progress on Walmart.com with general merchandise. We’re mixing the business out better to achieve better margin rates, but there is more work to do. We’re committed to progress and building a larger, healthier eCommerce business. our customers want that, our marketplace sellers want that, and so do we.”
Activist investor Jana Partners added its name to the growing list of investors—including Praesidium Investment Management and Sachem Head Capital Management—pushing U.S. educational software company Instructure to explore alternatives. This comes just a day after the company was reported to be exploring strategic options, including a possible sale. Praesidium co-founder and managing partner Kevin Oram said in an interview that the firm has identified multiple potential buyers for Instructure’s learning management platform. “The platform is extremely powerful because it has such a dominate market share,” Oram said. “We think it has customer retention rates of close to 100%. i don’t think they’ve ever lost a customer. That’s really valuable.”
Shares of Ping Identity are up more than 14% this morning after the cybersecurity company delivered what a Citi analyst called a “solid out of the gates” earnings report. Ping reported Q3 revenue of $61.8 million, up 45% year-over-year. “Our strong third quarter results were driven by Ping Identity’s Intelligent Identity leadership in securing customer, employee, partner and IoT identities across the enterprise market, and bolstered by marketwise momentum for identity solutions that enable digital transformation and simultaneously enhance security,” said Ping CEO Andre Durand. Citi analyst Walter Pritchard lifted his price target on the stock to $26 and wrote in a note, “Strength was driven especially by legacy replacement, installed base expansion, strength across multiple products and a strong international performance.”
Stocks We’re Watching
Cardlytics Inc (NASDAQ: CDLX): Cardlytics shares were up as much as 44% yesterday after the company posted a surprise Q3 profit and raised its full-year outlook. The purchase intelligence company reported quarterly revenue of $56.4 million, representing year-over-year growth of 63%, and translating to adjusted net income of $800,000. Cardlytics’ billings also jumped 70% compared to the year prior period to $82.8 million. “With our successful rollout of Chase complete and our upcoming rollout of Wells Fargo, our scale gives marketers the ability to reach bank customers at massive scale,” said co-founder and COO Lynne Laube. “Our ongoing initiatives to penetrate new verticals and enable a more automated buying model positions Cardlytics extraordinarily well for continued growth.”