U.S. markets faced renewed pressure on Monday after China devalued the yuan in an effort to fight back against U.S. President Donald Trump's additional tariffs. Last week, Trump imposed an additional 10% tariff on USD 300 Billion worth of Chinese goods starting on September 1st. China's move to devalue its currency will allow it to soften the damage the Trump has dealt. In response, Trump called China's decision "currency manipulation," leading analysts to believe that efforts for a trade agreement are abandoned. The Dow Jones Industrial Average plummeted by 406.87 points or 1.54% on Monday morning. On Tuesday, U.S. markets bounced back as the Dow closed over 300 points higher after China set its reference rate for its yuan at a stronger-than-expected level, according to MarketWatch. The People's Bank of China set the official reference rate of the yuan at 7.0039 yuan per dollar, marking the lowest level since 2008. Nonetheless, the reference rate was higher than what investors and analysts anticipated. On Wednesday, markets began to pull back once again, however this time amid rising concerns over the global economic weakness. By late afternoon on Wednesday, markets quickly reversed as the S&P 500 and Nasdaq Composite closed slightly higher. On Thursday, U.S. markets surged by 300 points as global bond yields rebounded and trade war fears began to settle among investors. The benchmark 10-year Treasury note yield traded at 1.71% after falling to 1.6% in the previous session. The bond yield rebound subsided investors' fears over the slowing global economy. Take-Two Interactive Software, Inc. (NASDAQ: TTWO), The Walt Disney Company (NYSE: DIS), Roku, Inc. (NASDAQ: ROKU), The Trade Desk, Inc. (NASDAQ: TTD), Uber Technologies, Inc. (NYSE: UBER)
The rebound on Thursday allowed U.S. markets to recover a significant portion of the losses they witnessed throughout the rocky week. As of late Thursday afternoon, the Dow Jones Industrial Average was up 296.26 points or 1.14%. The S&P 500 was up 46.71 points or 1.62%, while the Nasdaq Composite gained 158.6 points or 2.02%. "The net result of all this has been a collapse in global rates both at the long end and short end of curves that far outstrips the deceleration in global activity," said Michael Shaoul, Chief Executive Officer of Marketfield Asset Management, in a note. "We are far more used to seeing the reverse take place, with central banks historically slow to react to sharp deteriorations in corporate earnings and only stepping in once employment markets start to signal the impact on employment."
Take-Two Interactive Software, Inc. (NASDAQ: TTWO) released its first quarter financial results after the market close on Monday. The game developer reported stronger-than-expected results, sending shares surging by over 11% at the open on Tuesday. For the first quarter, Take-Two reported earnings of USD 0.41 per share on revenues of USD 540.5 Million. Take-Two did not provide adjusted earnings results for the quarter. However, analysts polled for adjusted earnings of USD 0.04 per share. Overall, Take-Two reported a solid quarter driven by its popular franchise games such as NBA 2K19, Grand Theft Auto Online, Grand Theft Auto V, Red Dead Redemption 2, and its Borderland franchise series. The popularity of the games allowed the Company to deliver 39% growth in its revenue and a 46% increase in net bookings, reaching USD 422.2 Million for the quarter. Analysts expected net bookings of USD 357 Million.
The Walt Disney Company (NYSE: DIS) reported its third quarter financial results after the closing bell on Tuesday. Disney missed analysts' estimates for both revenues and earnings, causing shares to fall by 5% during Wednesday's pre-market hours. For the third quarter, Disney reported earnings of USD 1.35 per share on revenues of USD 20.25 Billion. Analysts expected earnings of USD 1.75 per share on revenues of USD 21.47 Billion. Disney mentioned that its weaker-than-expected quarter was primarily because of its effort to integrate 21st Century Fox assets into its transformation. Disney also announced it expects Disney+ to launch in November this year at a cost of USD 7.99 per month and will feature services such as Disney, Pixar, Marvel and Star Wars.
Roku, Inc. (NASDAQ: ROKU) reported its second quarter financial results after the market close on Wednesday. The streaming service provider reported better-than-expected quarterly results and provided an upbeat guidance, sending shares soaring by over 20% on Thursday morning. For the second quarter, Roku reported earnings loss of USD 0.08 per share on revenues of USD 250.1 Million. Analysts expected earnings loss of USD 0.21 per share on revenues of USD 224.4 Million. Roku reported that its revenue surged by 59% year-over-year, primarily driven by the increase in active accounts and streaming hours. Active accounts reach 30.5 million, a net addition of 1.4 million quarter-over-quarter. Roku's active account numbers fell in-line with estimates. With the addition of over a million accounts sequentially, Roku also reported that streaming hours increased by an additional 0.5 billion hours compared to 9.4 billion in the previous quarter. Streaming hours rose by 72% year-over-year. The increase in active accounts and streaming hours led to an average revenue per use (ARPU) of USD 21.06, increasing by USD 2.00 from the previous quarter.
The Trade Desk, Inc. (NASDAQ: TTD) reported its second quarter financial results during extended trading hours on Thursday. Despite beating estimates, shares slipped by 5% shortly after reporting. For the second quarter, Trade Desk reported earnings of USD 0.95 per share on revenue of USD 159.9 Million. Analysts' consensus estimated earnings of USD 0.68 per share on revenue of USD 155.1 Million. Revenue grew by 42% year-over-year, representing a decline from the second quarter's year-over-year growth of 54% in 2018. Nonetheless, Trade Desk witnessed growth across its business segments. The Company reported mobile video spending grew by 50% year-over-year, while mobile-in app grew by 63% in the same period. Connected TV spend rose by 2.5x year-over-year and audio spend jumped by 270% year-over-year. Based on the stronger-than-expected quarter, Trade Desk revised its financial outlook and now expects revenues of USD 163 Million for the third quarter. As for the full year, Trade Desk expects revenues of at least USD 653 Million, increased from its previous forecast of USD 645 Million.
Uber Technologies, Inc. (NYSE: UBER) reported its second quarter financial results after the market close on Thursday. Shares plunged by 12% after the ride hailing service Company reported a larger-than-expected earnings loss. For the quarter, Uber reported an earnings loss of USD 4.72 per share on revenue of USD 3.17 Billion. Analysts projected earnings loss of USD 2.03 per share on revenue of USD 3.3 Billion. Gross bookings for the quarter rose by 31% to USD 15.75 Billion. Monthly active platform consumers jumped by 30% to 99 million and recorded over 1.67 billion trips, representing a 35% increase year-over-year.
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