Plus, Best Buy delivered an earnings beat, top tech executives are expected to meet with President Biden at the White House tomorrow to discuss cybersecurity, and Peloton announced its new Tread treadmill.
Stocks were higher at the open on Tuesday with the Dow adding 47 points, or 0.1%. The S&P 500 also rose 0.1%, while the Nasdaq gained 0.2%.
Chinese tech stocks surged to start Tuesday after the country’s cybersecurity regulator clarified two conditions for companies wanting to go public, including overseas, following the passage on Friday of the Personal Information Protection Law which is set to take effect in November. Companies based in the country now must comply with national laws and regulations, and ensure the security of the national network, “critical information infrastructure” and personal data, vice minister of the Cyberspace Administration of China, Sheng Ronghua, said. “Investors should be able to glean much better insight into sub-sector trends and company outlooks during earnings season,” Jefferies equity analyst Thomas Chong said in a note, referring to Chinese stocks that have recently been weighed down by regulatory pressures. “Indeed, a number of key issues have already been addressed. With the drastic pullback in sector valuation in recent months… and the passing of the personal data privacy law last Friday, we expect a re-focus on sector themes as expectations continue to be reset, with the 2022 store the next waypoint, rather than the outlook for 4Q.” Shares of JD.com are up more than 12% at the time of writing, Alibaba is up 7%, Tencent is up more than 8%, and Meituan is up nearly 14%.
Best Buy shares are up over 6% this morning after the company delivered an earnings beat. The consumer electronics retailer reported adjusted earnings per share of $2.98 on revenue of $11.85, while analysts were expecting a reading of earnings per share of $1.85 on revenue of $11.49 billion. “We are reporting record second quarter results today with comparable sales growth of 20% and operating income growth of 40% compared to last year,” CEO Corie Barry said in the earnings release. “Customer demand for technology products and services during the quarter remained very strong. Customers continued to leverage technology to meet their needs, and we are providing solutions that help them work, learn, entertain, cook and connect at home. The demand was also bolstered by the overall strong consumer spending ability, aided by government stimulus, improving wages and high savings levels. …Over the longer term, we are fundamentally in a stronger position than we expected just two years ago. There has been a dramatic and structural increase in the need for technology.”
Chief executives from Amazon, Apple, Microsoft, and other major companies are expected to meet with President Joe Biden at the White House tomorrow to discuss cybersecurity. The meeting comes as the Biden Administration grapples with the growing threat of cyber attacks amid several recent breaches. White House Press Secretary Jen Psaki described the event as “a meeting with private sector leaders to discuss how we work together to collectively improve the nation’s cybersecurity.” In addition to Amazon CEO Andy Jassy, Apple’s Tim Cook, and Microsoft’s Satya Nadella, the CEOs of Google and IBM were reportedly invited to the meeting.
Peloton is up more than 4% this morning after the company announced that a less expensive version of its treadmill is set to debut in the U.S. next week. The newly redesigned Tread machine starts at $2,495 and will be available for purchase in the U.S. and Canada on Monday. The introduction of the new Tread machine comes after Peloton voluntarily recalled both its Tread and Tread+ treadmills over safety concerns back in May following the death of a child who was pulled under the Tread+. “Our goal is to be the go-to fitness solution and the largest and safest home fitness brand in the world,” John Foley, Peloton’s CEO and co-founder, said in a statement. “We’ve worked hard to make sure the new Tread truly earns its spot in Members’ homes. We’ll always continue to innovate our hardware, software and safety features to live up to our commitment to Member safety and to improving the full Member experience.”
And Fall is starting early… at Starbucks. The coffee chain unveiled its fall menu late yesterday, announcing a new apple crisp macchiato in addition to the cult favorites pumpkin spice latte and pumpkin cream cold brew. The seasonal lineup will be available in stores in the U.S. and Canada beginning today, and also includes bakery items including a pumpkin cream cheese muffin and pumpkin scone. “Pumpkin spice is now a default option on fall menus, so foodservice operators have to find new flavors to set themselves apart,” said Datassential trendologist Mike Kostovo, “which is why we see additional flavors like chai and apple trending in the fall.”
Stocks We’re Watching
Anixa Biosciences Inc (NASDAQ: ANIX): Anixa Biosciences announced yesterday that board member Dr. Arnold Baskies had been appointed to the World Health Organization’s Global Breast Cancer Initiative. “We are pleased that Arnie will be working with the WHO on the Global Breast Cancer Initiative,” Anixa President and CEO Dr. Amit Kumar said in a statement. “We are also humbled by his continued contribution to our company as a member of our Board. Breast cancer is now the most common malignancy diagnosed in the world. Our breast cancer vaccine that we are developing in partnership with the Cleveland Clinic and the U.S. Department of Defense is expected to begin clinical testing shortly. It would be wonderful if we could provide the women of our world with a powerful tool that could prevent the occurrence of breast cancer.”