Procter & Gamble is trading up 1 percent on reports that the company is set to name David Taylor as its new chief executive officer by Thursday.
Taylor currently is the group president for global beauty, grooming and healthcare and has worked in several areas of the company. The combined group was more than half of the company’s sales. The current ceo, A.G. Lafley, recently made a deal to sell 43 beauty brands to Coty. Procter & Gamble will report its fourth quarter and full year earnings on Thursday before the market opens. Thomson Reuters has the earnings estimate of $0.95 a share for the quarter, one cent better than last year. Lafley reportedly would remain chairman.
Overall in global stock markets, the Chinese market closed down once again Tuesday, but not nearly as bad as the crash the day before. The Shanghai Composite closed down 1.7 percent, but had been down as much as 5.1 percent at one point. That recovery set a positive mood for the European markets and the U.S. markets. Europe traded higher across the board and in the U.S., the Dow Jones, S&P 500 and Nasdaq all opened higher.
Europe was helped when Kering’s stock jumped 6.6 percent after its flagship brand Gucci delivered a 4.6 percent rise in second quarter sales. Analysts had expected a decline of 3.2 percent. Gucci benefited from Chinese shoppers going to Japan to buy their luxury goods and the company also ran deep discounts for their product to clear inventory. Kering’s revenue jumped to 5.5 billion euros in the first half of 2015, an increase of 17 percent over last year, although profits fell 13 percent.
Separately, Kering chief financial officer Jean-Marc Duplaix also asked that rents in Hong Kong be lowered to match the change in the market. Mainland China has been discouraging luxury shopping among its government officials. As a result high-end shopping is at its lowest level in two years.
The luxury sector continued to move higher in London as Burberry Group stock jumped over 2 percent in trading. Like Kering, Burberry has suffered from the weakness in Hong Kong, but has enjoyed the pickup in Japan where Chinese shoppers have chosen to spend instead. Burberry is also in the midst of transitioning from its Japanese specific labels to its global brands, which should be completed this September. Investors clearly hope the luxury names are on the comeback with Chinese tourists.
The international recovery story played out over at United Parcel Service where shares got a lift after the package delivery company reported higher second quarter net profit, even as revenue dropped. Cfo Richard Peretz said in a statement, “The second quarter results reflect continuing gains in our international business.” The company delivered an 8.5 percent increase in intra-Europe shipments. Revenue fell 1.2 percent to roughly $14.1 billion, with UPS blaming the strong dollar and lower fuel surcharges. Second quarter net income came in at $1.23 billion, or $1.35 a share, an increase of almost 10 percent from last year’s $1.12 billion or $1.21 a share. Guidance is unchanged, but the company said it could come in at the higher end of the range for the full year, which is $5.05 to $5.30.
Online food ordering service GrubHub saw its shares pop over 9 percent after reporting it had a profit of 11 cents a share and earnings of 17 cents per share. Analysts only expected 14 cents a share as per Zacks Investment Research. The number of active diners climbed 42 percent. The stock has been down 15 percent for the year
In economic news, the Case Shiller report said that the home price index declined 0.18 percent, the biggest drop in ten months. Home price increases are expected to slow. The biggest home price increases were in Denver, San Francisco and Dallas. New York City reported six consecutive months of increases with May increasing 3 percent over last year.
The two-day meeting of the Federal Reserve begins today, and while no one expects the Fed to announce a rate hike, market watchers are hoping for a hint as to whether Chair Janet Yellen will raise rates in September or December.
Investors will also be watching for earnings after the close on Tuesday from Yelp and Twitter. Yelp is down in early trading after a downgrade from Deutsche Bank.