U.S. stocks are dropping again this morning and again, China is to blame.
China reported weak manufacturing results, pulling back at a very fast pace to a three-year low. This pulled down the Shanghai Composite Index by 1.8 percent. The concern over the speed of the economy’s contraction in China is what spooked U.S. investors today.
The Dow Jones Industrial Average is falling 129 points to 16,335, the S&P 500 is dropping 15 points to 1,924 and the Nasdaq is losing 35 points to 4,578. The S&P Retail ETF is down over 1 percent to $40.51.
The U.S. Department of Commerce released personal income and spending data for December this morning. Personal income and disposable personal income both increased 0.3 percent. Personal consumption expenditures dropped less than 0.1 percent. Personal outlays increased $2 billion in December, but that was much lower than November’s increase of $62.1 billion. Americans are saving more, with $753 billion set aside versus the $717 billion saved in November.
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Fitch downgraded the debt of Tiffany & Co. from A- to BBB+ and left the rating outlook as stable. The downgrade reflected Fitch’s changing expectations for Tiffany’s and cited signs of a luxury-spending slowdown in the U.S. as well as other key markets. Tiffany’s stock is dropping over 1 percent to $60.
Ernie Herrman officially begins his position of chief executive officer at TJX Companies today. Herrman was elected to the position by the board of directors on October 7, with Jan. 31 as the official start date. Herrman will continue as president and Carol Meyrowitz will remain chairman of the board and also will have a new title of executive chairman. TJX Companies is off by 50 cents to $70.74.
Nautica is introducing a new brand and design strategy. “Inspired by the seas, designed in the city” is the new message for the company. It will launch with the spring collection and will be nautically inspired style in hopes of differentiating itself from other fashion brands. Nautica is a brand in the VF Corp. family. VF’s shares are dropping by 61 cents to $61.99.
Elsewhere in the market, last week’s oil rally is fizzling and the price per barrel is back down to $32. Gold continues to hold up well, adding another $4 today to trade at $1,121 per ounce. Gold is up over 5 percent for the past 30 days.
European markets caught the Chinese cold and also began trading in negative territory. Economic reports out of the euro zone were a mixed bag with Germany delivering positive manufacturing numbers, while Italy missed badly.
Google — or if you use its real name Alphabet — will report its earnings results after the market close today. The market consensus is for $8.10 in earnings per share on $20.77 billion in revenue.