U.S. stock futures rose on Friday morning, with the S&P 500 climbing 0.7% despite the overall decline in equities for September and the third quarter. Historically, a bad September often leads to a good October for the stock market. Bond yields pulled back slightly, and oil prices rose over 1%. There are concerns about a looming government shutdown, which could potentially slow the economy but benefit the inflation picture.
In company news, Nike’s quarterly revenue fell short of Wall Street’s expectations for the first time in two years. However, the company beat earnings and gross-margin estimates, causing the stock to soar almost 10% in premarket trading. Despite inventories being down, Nike’s China business is doing well, and it appears to have a clear path to the Paris Olympics next summer.
Barclays made an unusual move by lowering its price target on beer maker Constellation Brands, while still maintaining an overweight rating on the stock. The analyst conference call on October 5th may shed more light on this decision. Morgan Stanley raised its price target on cybersecurity firm Zscaler, while reiterating an equal-weight rating, but the CNBC Investing Club prefers Palo Alto Networks. Canaccord has a positive outlook on Tesla, stating that demand for the electric-vehicle maker remains healthy despite a challenging auto market. Manufacturing company Jabil beat earnings, and Barclays raised its price target. Jabil is also one of Apple’s suppliers.
Bank of America lowered its price target on Accenture, but still maintained a buy rating, citing cautious demand commentary. Baird lowered its price target on used-vehicle retailer CarMax, indicating weakness in the lower-end consumer market. Bank of America also lowered its price target on United Parcel Service (UPS), stating that CEO Carol Tome outlined a challenging backdrop, particularly in the small-package market.
