STOCK MARKET NEWS: Dow gains on Disney jump after activist move, housing headwinds mount

ZipRecruiter is falling in after-hours trading. The online employment marketplace lowered its 2022 revenue outlook in response to softening demand.

“In June we began to see signs of a cooling hiring environment," said CEO Ian Siegel in a statement.

The company estimates full year revenue will be $883 to $897 million, representing 20% growth versus 2021 at the midpoint. ZipRecruiter previously forecast revenue of $878 to $892 million, representing year over year growth of 18%-20%.

“We expect the difficult macroeconomic backdrop of increasing inflation, rising labor costs and interest rates to have a more pronounced impact on the hiring environment in the second half of 2022,” the company said.

Second quarter revenue rose 31% to $239.9 million. The company expects third quarter revenue of $217 to $223 million.

Net income was $13.1 million compared to a net loss of $52.8 million in the prior year quarter.

Fabrinet is up more than 13% in after-hours trading. The provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services reported revenue that topped Wall Street estimates.

Fiscal fourth quarter revenue rose 15% to $587.9 million, topping expectations of $581.5 million.

Net income rose 33% to $56.2 million, or $1.51 per share.

The company expects first quarter revenue of $620 million to $640 million and net income per diluted share of $1.51 to $1.58.

Fabrinet also approved the repurchase of up to an additional $78.7 million of ordinary shares, bringing the aggregate authorization under its existing share repurchase program to $247.2 million, with $100.0 million currently remaining.

SlateStone Wealth Partners chief market strategist Kenny Polcari and T3 Trading CSO Scott Redler react to Walmart's push into streaming on 'The Claman Countdown.'

Shares of bankrupt cosmetics company Revlon Inc soared nearly 27% on Monday after asset manager Morgan Stanley revealed in a filing that it purchased 400,650 shares in the company over the last quarter.

The purchase increased Morgan Stanley's stake by approximately 1,793%, according to its filing, known as a 13-f.Shares of Revlon are up 582% from their mid-June low, boosted by hopes the company can replicate the success of shareholders in car-rental company Hertz, who were handsomely rewarded when Hertz was rescued from bankruptcy by a group of investors.

Revlon's rebound has come alongside rallies in other so-called meme stocks popular with retail investors such as AMC Entertainment Holdings Inc and GameStop Corp, which were hit hard in the first half of the year.

Revlon filed for Chapter 11 bankruptcy in June after saying that its high debt load left it too cash-poor to make timely payments to vendors. The company received approval for a $1.4 billion bankruptcy loan on Aug. 1 despite objections from its official creditors committee, which called the company a "mess" in a court filing.

Despite the recent rally, Revlon's shares are down 30% for the year-to-date.

National Association of Home Builders CEO Jerry Howard pointed to the NAHB/Wells Fargo Housing Market Index declining for eight consecutive months, as well as the fact that it reached below the 'neutral' level, as indicating sentiment is 'sinking.'

Nexstar Media Group, the owner of the America’s largest local broadcasting group, is taking a 75% ownership interest in The CW Network from Warner Bros. Discovery and Paramount Global.

Warner and Paramount will each retain a 12.5% ownership interest and will continue to produce original, scripted content for The CW.

Nexstar owns, or is a partner with, 200 stations and is the largest CW affiliate.

The transaction is expected to close in the third quarter. Terms were not disclosed.

WARNERMEDIA AND VIACOMCBS ARE EXPLORING POSSIBLE SALE OF CW NETWORK

Weber spiked more than 20% in Monday morning trading before giving back some gains.

The maker of charcoal, gas and electric grills and accessories topped Wall Street revenue estimates but missed on profit.

Second quarter net sales fell 21%, to $528 million, driven by slower retail traffic due to rising inflation, supply chain constraints, geopolitical uncertainty and fuel prices, as well as foreign currency devaluations. Analysts expected $526 million.

The net loss was $52 million compared to a year earlier profit of $18 million. The adjusted loss was 35 cents versus the estimate of 2 cents.

Weber will suspend its cash dividend, cut management layers with a “reduction in force”, and tighten of global inventory levels and working capital positions to manage cash flows, preserve liquidity, expand gross margins, and reduce SG&A expenses.

Activist investor Third Point Management has accumulated a position in Walt Disney.

The firm headed by Dan Loeb sent a letter to Disney CEO Bob Chapek stating it has filed for Hart-Scott-Rodino approval so it can engage with management and the board “since the company will likely require additional strategic, capital allocation, and governance changes to ensure its success.”

Third Point suggests Disney consider:

• Cutting the highest costs in the industry,

• Continue a policy of suspending dividend payments and use the money to buyback shares or reinvest in the business,

• Integrate Hulu into Disney+ to provide significant cost and revenue synergies, and

• Spinoff ESPN to shareholders.

Courtesy: Federal Reserve Bank of New York

Manufacturing in the New York region saw a sharp, surprise contraction of -31.3 vs. the prior month's 11.1 read, according to the New York Fed's Empire Manufacturing Survey.

"New orders and shipments plunged, and unfilled orders declined. Delivery times held steady for the first time in nearly two years, and inventories edged higher" the survey detailed.

Wall Street futures

U.S. stock futures are lower Monday morning on concerns over China's economy.

China's central bank cut a key interest rate for a second time this year.

Meanwhile, oil prices are also starting the week lower. West Texas Intermediate crude futures traded at around $87.60 a barrel while Brent crude futures traded at around $93.30 per barrel.

Bitcoin, Ethereum and Dogecoin were all lower heading into the workweek. (Getty Images)

Cryptocurrency prices were lower early Monday.

At approximately 4:45 a.m. ET, Bitcoin was trading at more than $24,000 (-1.23%), or lower by nearly $300. For the week, Bitcoin was trading higher by nearly 5%. For the month, the cryptocurrency was higher, gaining more than 18.25%.

Ethereum was trading at approximately $1,900 (-1.97%), or lower by nearly $40. For the week, Ethereum was trading higher by about 14%. For the month, it was trading higher by almost than 62.75%.

Dogecoin was trading at $0.075805 (-7.28%), or lower by approximately $0.006024. 

For the week, Dogecoin was higher by around 19.5%. For the month, the crypto was higher by more than 30.6%.

Michael Gapen, the chief economist for Bank of America, sees a 'mild' recession coming this year. (Reuters)

Is the U.S. economy on the cusp of a recession? According to Bank of America's newest chief economist, the answer is yes.

Michael Gapen, the head of U.S. economics at Bank of America, told FOX Business that he expects the Federal Reserve to inadvertently trigger a downturn this year with its war on inflation. 

"This cycle probably ends in a mild downturn," Gapen said. "How do I come to that? It's basically just history. It's really hard to achieve a soft landing." 

Although Fed policymakers are counting on finding that elusive sweet spot – known as a soft landing – as they hike interest rates at the fastest pace in three decades, history shows that the U.S. central bank often struggles to successfully thread the needle between tightening policy and preserving economic growth. 

Recent research from Alan Blinder, a former Federal Reserve board vice chairman and a Princeton economist, identified 11 tightening cycles since 1965, of which eight were followed by recessions. Still, that doesn't mean a severe recession is guaranteed: There were five very mild recessions in which GDP fell less than 1%, or there was no economic decline at all.

Fed Chairman Jerome Powell had previously identified three examples, in 1965, 1984 and 1994, when the Fed tightened monetary policy, reduced inflation, and saw no decline in growth.

Gapen projected that a recession would likely be mild rather than prolonged.

"Am I saying that the Fed blows it? No," he said. "They have an interest rate policy and balance sheet tools, and they're kind of blunt instruments. It's hard to precisely target things. That's not the way our economy works, just historically you're more likely to get something worse than a soft landing."  

There are growing fears on Wall Street that the Fed could inadvertently send the economy into a recession as it takes a more aggressive approach to fighting inflation, which is at a multi-decade high. Policymakers have approved four consecutive rate hikes, including back-to-back 75 basis point increases. They have confirmed that another super-sized increase is on the table in September as they remain "strongly committed to returning inflation to its 2% objective." 

Powell said during his post-meeting press conference in July that another 75-basis point hike could be appropriate in the future but that it ultimately hinges on upcoming economic data. 

Gasoline and diesel prices fell slightly early Monday morning nationwide. (gasprices.aaa.com)

The average price of a gallon of gasoline fell slightly to $3.956 on Monday, after slipping on Sunday to $3.959, according to AAA. Saturday's price was $3.965. 

The price dropped below $4 for the first time since March on Thursday, when the price fell to $3.99. 

One week ago, the nationwide price of a gallon a gasoline stood at $4.059. One month ago, the price was $4.577, while a year ago, that same gallon of gasoline cost $3.184. 

Gas has been on the decline since hitting a high of $5.016 on June 14. 

Diesel slipped on Monday as well to $5.033. On Sunday, a gallon of diesel cost $5.041, while on Saturday, that same gallon of diesel cost $5.047. 

On week ago, the nationwide price for a gallon of diesel was $5.143. A month ago, a gallon of diesel was $5.572, while a year ago, diesel sold for $3.296 per gallon.

US stocks were lower early Monday after China cut a key interest rate on one-year loans and injected an extra 400 billion yuan ($60 billion) in lending markets after government data showed July factory output and retail sales weakened. (Associated Press)

U.S. stocks were lower early Monday morning after The People’s Bank of China cut its rate on a one-year loan to 2.75% from 2.85% and injected an extra 400 billion yuan ($60 billion) in lending markets after government data showed July factory output and retail sales weakened. 

Stocks in the U.S. rose Friday with major indexes notching gains for the week as investors cheered signs of a slowdown in inflation. 

The S&P 500 and the Nasdaq Composite both posted their fourth consecutive week of gains. That marked their longest stretch since a streak that ended in early November, when both rose for five weeks in a row. 

Investors hope a recent deceleration in consumer-price growth will encourage the Federal Reserve to raise interest rates at a slower pace, which in turn could prevent the economy from tipping into a recession.

Lower rates tend to boost prices for stocks, bonds and more speculative assets like cryptocurrencies, and stocks have swooned this year in part because of the Fed's aggressive rate increases. 

Though inflation is still near the highest it has been in decades, data Wednesday showed that it had eased, clocking in at 8.5% in July compared with 9.1% in June. 

Data on Thursday showed that U.S. suppliers raised prices in July at the slowest annual pace since last fall, buoyed by a drop in energy prices. 

On Friday, the S&P 500 climbed 72.88 points, or 1.7%, to 4280.15. The Nasdaq Composite jumped 267.27 points, or 2.1%, to 13047.19. The Dow Jones Industrial Average rose 424.38 points, or 1.3%, to 33761.05. The Dow rose 2.9% for the week. The Nasdaq and the S&P 500 were up more than 3% for the week. 

Investors will pay extra attention to second-quarter earnings reports from retailers Walmart, Target, Lowe’s, TJ Maxx and Ross stores and also to the health of the U.S. consumer, providing some clarity on the impact of inflation on corporate profits.

The markets will also be focusing on management guidance for confirmation of recent data showing inflation has peaked.

In addition, The New York Federal Reserve will kick off this week’s economic reports at 8:30 a.m. ET Monday with a closely watched gauge of regional manufacturing activity.

The Empire State Manufacturing Survey is expected to decline to 5.5 in August, from a stronger-than-expected reading of 11.12 the previous month when it exited contraction territory (a number above zero means that more New York-area manufacturers say business conditions are improving rather than worsening.) 

Also reporting will be several housing-related reports due out this week.

At 10 a.m. ET, the National Association of Homebuilders will release its Housing Market Index for August. The homebuilder sentiment gauge is anticipated to hold steady at 55, the lowest since May 2020, after tumbling much more than expected to that level last month after high inflation and mortgage rates hurt home sales and buyer traffic. It would signal that barely more than half of NAHB members regard business conditions as good.

Other reports to watch this week are housing starts and building permits on Tuesday, and existing home sales on Thursday, both for the month of July. 

Meanwhile, shares were mixed in Asia after China cut a key interest rate and Japan reported its economy expanded at a faster pace in the last quarter. 

Tokyo and Sydney advanced while Hong Kong and Shanghai fell. 

Tokyo's Nikkei 225 index added 1.1% to 28,871.78 and the S&P/ASX 200 in Sydney climbed 0.4% to 7,062.50. T

he Shanghai Composite index edged 0.1% lower to 3,275.34, while Hong Kong's Hang Seng index gave up 0.4% to 20,092.37. 

South Korean markets were closed for a holiday. 

Bangkok's SET index rose 0.4% after the Thai government reported the economy expanded at a 0.7% quarterly pace in April-June, slowing from 1.1% growth in the first quarter of the year.

Saudi Aramco now says it is ready to ramp up output of oil. (Getty Images)

Oil prices dropped for a second session on Monday as weak China economic data triggered concerns about demand at the world's largest crude importer while the head of the world's top exporter, Saudi Aramco, said it was ready to ramp up output. 

Brent crude futures fell $1.14, or 1.2%, to $97.01 a barrel by 0631 GMT after settling 1.5% lower on Friday. U.S. West Texas Intermediate crude was at $91.03 a barrel, down $1.06, or 1.2%, after a 2.4% drop in the previous session.

China's economy unexpectedly slowed in July, while refinery output slipped to 12.53 million barrels per day, its lowest since March 2020, government data showed.

Saudi Aramco stands ready to raise crude oil output to its maximum capacity of 12 million bpd if requested to do so by the Saudi Arabian government, Chief Executive Amin Nasser told reporters on Sunday. 

"We are confident of our ability to ramp up to 12 million bpd any time there is a need or a call from the government or from the ministry of energy to increase our production," Nasser said.

He added that China's easing of COVID-19 restrictions and a pickup in the aviation industry could add to demand. 

Oil prices rebounded more than 3% last week after a damaged oil pipeline component disrupted output at several offshore Gulf of Mexico platforms and as investors pared back expectations for interest rate increases in the United States. 

Producers had moved to reactivate some of the halted production after repairs were completed late Friday, a Louisiana official said. 

Global oil markets remained supported by tight supplies in the run-up to EU sanctions on Russian crude oil and refined product supplies this winter. 

More supplies could come if Iran and the United States accept an offer from the European Union to revive the 2015 nuclear deal, which would lift sanctions on Iranian oil exports, analysts said.