Markets were heading lower on Friday morning after U.S consumer sentiment levels hit a 14-month high. The Thomson Reuters/University of Michigan’s preliminary reading for September showed a rise to 84.6, which is the highest level recorded since July 2013. This was also up from the 82.5 reading last month. The data beat out analyst’s expectations of 83.3. The section of the report that shows consumer expectations made a jump from 71.3 to 75.6. There was a slight drop in the reading of current economic conditions, which fell to 98.5 from the 99.8 reading last month. Director of the survey, Richard Curtin, said, “All of the early September gain was in the Expectations Index, while consumers judged current economic conditions slightly less favorably than in August. Although consumers anticipated a slowdown in employment growth, (they) expected the highest rate of growth in their wages in six years.”
Shares of Darden Restaurants, Inc. (DRI) were sinking after the company announced first-quarter earnings. The company said they had a net loss of $19.3 million, or 14 cents per share. This was down drastically from the profit of $42.2 million, or 32 cents per share the year prior. Revenue was up 4% to $1.59 billion. There was a drop in same-store sales at on of the company’s biggest chain, Olive Garden. Olive Garden accounts for nearly two-thirds of profit. Same-store sales were down 1.3%. Darden President, Gene Lee, said, “We are pleased with the progress we are achieving across our brands, particularly Olive Garden.” He added, “The Olive Garden Brand Renaissance is well underway.”
Shares of Ford Motor Co. (F) were falling slightly after the company announced they would be placing a recall on two hybrid SUVs. The company said the recall would affect nearly 74,000 vehicles and includes Ford Escapes manufactured between 2005 and 2008 and Mercury Mariners built from 2006 to 2008. Ford announced that the coolant pump for the hybrid system could fail, which would in turn cause the electronics to overheat. This could cause the engine to shut off.
That’s all for today,
Warren Gates, Normandy Research