Thursday, November 13, 2014

Higher markets on Wal-Mart earnings

Dow climbed 87, advancers only slightly ahead of decliners & NAZ added 26.  The MLP index went up 1+ to 502 & the REIT index added 2+ to 219.  Junk bond funds slid lower & Treasuries retreated while stocks rose.  Oil sank to the 75s, another new low, & gold inched higher.

AMJ (Alerian MLP Index tracking fund)

CLZ14.NYM....Crude Oil Dec 14...76.16 Down ...1.02  (1.3%)

GCX14.CMX...Gold Nov 14.....1,163.80 Up ...4.90 (0.4%)

3 Stocks You Should Own Right Now - Click Here!

Job openings in the US held near a 13-year high in Sep, a sign the pickup in hiring may be sustained thru year-end.  The number of positions waiting to be filled in the US eased to 4.74M, 2nd only to 4.85MM in Aug (the highest since Jan 2001), according to the Labor Dept.  The rate of hiring matched the strongest since the recession began & the number of Americans quitting their jobs also increased.  More openings reinforce signs that the labor market’s recovery is gaining traction, with job gains on pace for their best performance since 1999 & the unemployment rate at its lowest in more than 6 years.  The figures are among those that the Federal Reserve uses to assess the employment picture & judge whether the economy is healthy enough to withstand a rise in interest rates.

September Job Openings in U.S. at Second-Highest Since 2001

Wal-Mart Stores Inc. Chief Executive Officer Doug McMillon
Photo:   Bloomberg

Wal-Mart, a Dow stock & Dividend Aristocrat, Q3 earnings beat estimates after US same-store sales grew for the first time in 7 qtrs.  EPS was $1.15, beating the $1.12 forecast.  US comparable-store sales, a closely watched benchmark, increased 0.5%.  While growth remains muted in the US, the sales increase signals that CEO Doug McMillon is making progress in his turnaround plan.  McMillon has been adding more small-format stores to increase revenue & trying to improve customer services.  The company also may benefit from falling gas prices & a drop in US unemployment.  Even as sales rebounded, the company lowered its EPS forecast for the year to $4.92-$5.02, down from as much as $5.15.  The new outlook includes a 3¢ impact from the closing of underperforming stores in Japan.  WMT had already cut its forecast earlier this year, citing higher US health-care costs & increased spending in e-commerce, where it aims to challenge the competition.  The company & federal authorities also are investigating possible violations of the Foreign Corrupt Practices Act in the company’s operations in Mexico, Brazil, China & India.  FCPA & compliance-related costs were about $41M last qtr.  Total revenue rose 2.9% to $119B in the period.  Net revenue at US stores rose 3.4% to $70B, while intl sales climbed 1.7B to $33.7B.  Sam’s Club’s net sales gained 2.3%, & e-commerce revenue climbed 21%.  While WMT benefited from Neighborhood Market growth, a reduction in food-stamp benefits took a toll on sales.  In the US, the average transaction rose 1.2%, though traffic shrank 0.7%.  “We’re still not satisfied,” McMillon said.  “We have areas to improve, including in the customer experience and in our price leadership position, and we’re taking the steps necessary to fix these areas.”  The stock jumped 2.48 to a new record.  If you would like to learn more about WMT. click on this link:

Wal-Mart Posts Earnings That Top Estimates After Sales Rise

Wal-Mart (WMT)

Jobless claims increased 12K to 290K last week, the highest since Sep 20, according to the Labor Dept.  The forecast called for 280K.  It was the 9th straight week claims have been less than 300K.  Lines at state unemployment agencies have been shrinking this year as businesses hold the line on dismissals & take on more workers as sales advance.  Better employment prospects have helped bolster consumer confidence & sustained spending as the holiday shopping season gets under way.  The 4-week moving average rose to 285K last week from 279K.  The number continuing to receive jobless benefits climbed 36K to 2.39M & the unemployment rate among people eligible for benefits held at 1.8%.

Jobless Claims in U.S. Rose More Than Forecast Last Week

The earnings from WMT were good enough to make the bulls happy, but short of spectacular.  Full year EPS was revised lower & same store sales were drab, only good enough when compared with negative results previously.  The outlook for shopping season is far from clear as retailers are opening even earlier for Good Friday shopping.  Global problems such as military strife & sluggish economic are not going away soon.

Dow Jones Industrials

No comments: