U.S. stocks are off to a quiet start this morning with the major indices mostly flat. The S&P 500 is at 2,073, the Dow Jones Industrial Average is at 17,648 and the Nasdaq is at 5,027.
Asian markets had a mixed close, with Hong Kong’s Hang Seng down 0.2 percent, while China’s Shanghai Composite closed up 0.5 percent.
In Europe, last week’s ecstasy over potential monetary easing gave way to Monday morning reality, with most of the major indices trading lower. Only Germany was up slightly as the German Business Climate Index came in better-than-expected.
Michael Kors’ stock is up over 1 percent to $39 this morning even though it was downgraded to market perform from outperform by Cowen & Co. The price target was also lowered to $43 from $46. The analyst based his opinion on the findings of the National Handbags Survey that found the momentum for Kors handbags was slowing. The survey said that respondents preferred Kate Spade and Coach over Kors these days and that inventories were growing. The analyst may be a little late in making this call since Kors stock is already down 48 percent year-to-date.
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Macy’s stock is also lower today by almost 16 cents to $47.78 after Cowen & Co. downgraded the stock to market perform from outperform and sliced the price target to $52 from $70. The downgrade comes ahead of Macy’s earnings, which are expected to be reported on November 11. The analyst has concerns about Macy’s lack of upside comparable-store sales in the third quarter and worries there will be risks to fourth-quarter comps. The analyst looks to be late on this call as well, since the stock has already dropped 27 percent year-to-date.
The Estée Lauder Cos. Inc.’s stock is down by 8 cents to $84.13 after the company said it would take a stake in South Korean skin-care brand Dr. Jart+ and Do The Right Thing. South Korean skin care has been the current trend in beauty products and Lauder wanted a piece of the pie. Terms of the deal, which is expected to close in December, were not disclosed. In August, Lauder stock plunged over 5 percent when the company said it had been hurt by poor sales in skin-care products. Presumably, this stake will help bolster its skin-care sales.
Aéropostale is looking past teenagers and heading into home products. The challenging teen retail environment has forced the company to look beyond jeans and into bedding. Aéropostale signed a licensing agreement with the home textile company Himatsingka America. The home collection is expected to hit markets in the 2016 back-to-school season. The company was warned by the New York Stock Exchange several months ago that its stock faced delisting if it remained under $1. The stock was down slightly more than 1 percent this morning to 76 cents.
Looking ahead, IAC/Interactive reports its earnings after the market’s close with analysts expecting the company to deliver earnings of 53 cents a share.