On the economic and policy fronts, there were a few developments during the truncated week. There was only a small amount of corporate news, with Levi Strauss & Co (NYSE: LEVI) and Costco Wholesale Corporation both reporting fiscal second-quarter earnings (NASDAQ: COST). Stellantis N.V. (NYSE: STLA) had an investor event called EV Day 2021 on the same day.
Monday
Due to Independence Day, the stock markets in the United States were closed on Monday.
Tuesday
There were two reports on July 6th. As part of the campaign against the Delta form of Covid-19, the Institute for Supply Management released its Services Purchasing Managers’ Index for June, and the Reserve Bank of Australia will announce its monetary-policy decision.
Wednesday
The minutes from the Federal Reserve’s monetary policy committee’s eventful mid-June meeting were released on July 7th, when members signaled that interest rates will rise sooner and faster than Wall Street had predicted, with inflation climbing at its quickest rate since 2008.
The Bureau of Labor Statistics (BLS) issued the May Job Openings and Labor Turnover Survey, with experts predicting that the result will be similar to that of April, which was the highest since the statistics were first gathered in December 2000.
Mortgage applications for the week ending July 2nd were reported by the Mortgage Bankers Association. Mortgage applications fell 6.9% last week and in four of the previous six weekly polls, indicating that supply restrictions have driven home price rise to new highs.
Thursday
Levi Strauss’s Business Rebounds
Investors were hoping for a lot of good news in Levi’s second-quarter report, which served as a litmus test for the stock’s recent surge. Expectations were sky-high after management revised its outlook and increased the dividend in early April. Sales were expected to rebound dramatically from the pandemic-affected period a year ago, with revenue up 150 percent. Investors are bullish for a reason, as CEO Chip Bergh indicated in April that the retailing sector is recovering “faster-than-expected.”
The big concern leading into last week’s announcement was whether Levi’s could sidestep the supply chain issues that forced Nike (NYSE: NKE) and Lululemon Athletica to raise their prices (NASDAQ: LULU). However, both of them were able to pass on price increases while keeping inventory levels under control, resulting in increased profitability even as the apparel industry’s behemoths were forced to rely on more expensive air freight.
Levi’s gross profit margin will be the number to monitor in the coming quarters, since profitability reached a new high thanks to a combination of higher prices and a shift toward e-commerce sales last quarter. If Levi’s supply chain holds up over the next few months, another record could be set.
Most Wall Street analysts estimate that sales will increase by roughly 33% in fiscal 2021, after falling by 23% the previous year. The goal is that not only will new sales records be broken, but that they will be broken at a larger profit margin due to a favorable selling climate. This week’s report should detail some of Levi’s most impressive growth and earnings patterns.
June Sales at Costco
Investors will be watching that report closely for signs of a slowdown in growth, as the last report had no such concerns, with sales jumping 24 percent after a similarly robust period last year. Despite consumer spending trends shifting away from necessities and toward more discretionary goods like electronics and home furnishings, the world’s second-largest retailer is seeing consistent demand rises.
The retailer’s June results might set the tone for the company heading into the summer selling season, with analysts anticipating an 11 percent increase in revenue in the quarter ending in August.
The EV Day of Stellantis
The automaker, which was founded earlier this year when Fiat Chrysler Automobiles (NYSE: FCAI) and Peugeot merged, revealed its electrification strategy to its shareholders.
Consumer credit data for May will be released by the Federal Reserve. In April, total outstanding consumer credit reached a new high of $4.24 trillion, as the economy’s sustained recovery and a hot housing market encouraged consumers to take on additional debt. Initial unemployment claims for the week ending July 3rd will be released by the Department of Labor.
Friday
After two days of negotiations in Paris, 130 countries representing more than 90% of global GDP approved a minimal global corporate tax rate, and Italy hosted a G20 summit of finance ministers and central bank governors. On behalf of the Biden administration, U.S. Treasury Secretary Janet Yellen pushed for a global minimum corporate tax rate of at least 15% from July 9th to July 10th.
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One of our external writers wrote the previous article.
It has not been modified and does not represent Benzinga’s perspective./n
