Firefighters flee as the Twisp River fire advances unexpectedly near Twisp, Washington.
Chinese manufacturing slumped to a 6.5-year low. China's Caixin Flash Manufacturing PMI fell to 47.1 in August, down from 47.8 in July. The reading was the weakest since March 2010, and is the latest sign of an economic slowdown in China. The internals of the report were ugly as most sub-indices fell at an accelerating rate. China's Shanghai Composite (-4.3%) tumbled back near the July lows.
Greece's prime minister resigned. Alexis Tsipras has stepped down as Greek prime minister just days after securing an €86 billion ($96.3 billion) bailout. The writing was on the wall for Tsipras as a large number of members of his Syriza party voted against the bailout he negotiated. Elections are likely to be held September 20. Greece's 2-year yield is higher by 144 basis points at 13.67%.
European Flash Manufacturing and Services PMI were both good and bad. The euro zone as a whole saw its manufacturing reading hold at 52.4 and its services number climb to 54.3. Both were better than expected. Germany's numbers were mixed as manufacturing improved to 53.2, its strongest since April 2014, but services slumped to 53.6. France was ugly. Manufacturing fell further into contraction with a 48.6 print and services slowed to 51.8. The euro is up 0.4% at 1.1291, a two-month high.
Korea's won fell to a 4-year low. The currency lost 0.8% versus the dollar to finish at 1194.82 after North Korea said its frontline army was entering a state of war. The won finished at its weakest since October 2011.
Hewlett-Packard reported mixed results. The computer giant announced earnings of $0.88 per share, topping analyst expectations by $0.03. Revenue was a bit light, coming in at $25.3 billion versus the $25.44 billion estimate. Hewlett-Packard saw a 13% drop in PC sales and a 9% slide in printing revenue. The lone bright spot was the Enterprise Group, which saw revenue edge up 2%. The company guided fourth quarter earnings of $0.92 to $0.98, which was shy of the $1.00 that Wall Street was anticipating.
Gap posts in-line quarter. The retailer earned an adjusted $0.64 per share, matching analysts' forecasts. Revenue slipped 2.1% to $3.90 billion, which was just shy of the $3.97 billion that was expected. Comparable sales for the quarter for Gap Global fell 6% while Banana Republic Global saw a drop of 4%. Old Navy outperformed, seeing an increase of 3%. Gap noted the weakness in the Canadian dollar and Japanese yen had a notable impact on their results. The company expects adjusted earnings of $0.63 to $0.64 per share in their second quarter.
Ross Stores tops estimates but warns. The discount retailer announced earnings of $0.63 per share, ahead of the $0.59 to $0.62 it had projected. Revenue rose 8.7% to $2.97 billion, edging out the $2.94 billion that analysts were expecting. "We are pleased with our solid sales and earnings growth for both the second quarter and first six months. These results reflect that our assortments of compelling name brand bargains continue to resonate with today's value-focused customers," CEO Barbara Rentler said in a statement. The company warned the second half of the year is expected to be challenging as department stores are expected to increase their discounts due to weak results.
Stock markets around the world are weaker. Aside from the plunge in China, Japan's Nikkei (-3%) paced the decline in Asia. In Europe, France's CAC (-1.2%) leads the way lower. S&P 500 futures are down 5.00 points at 2020.25.
The US economic calendar is quiet. At 9:45 a.m. ET, we'll get the Flash Manufacturing PMI report for August. From there, data remains absent until Tuesday. The US 10-year yield is up 1 basis point at 2.08%.
Earnings reports are light. Deere and Foot Locker highlight the list of companies releasing their quarterly results ahead of the opening bell.