Dow pulled back 106 following yesterday's rally, decliners slightly ahead of advancers & NAZ went up 56. The MLP index added 3+ to the 139s & the REIT index was off 2+ to the 317s. Junk bond funds fluctuated & Treasuries were bid higher. Oil rose to the 32s & gold recovered 13 to 1748.
AMJ (Alerian MLP Index tracking fund)
Home Depot's (HD), a Dow stock, Q1 profit slid 11% from a year ago as the company emphasized coronavirus safety measures & enhanced employee benefits. The home-improvement chain closed stores early beginning in mid-Mar to allow more time for sanitization & restocking essential products amid the COVID-19 pandemic & expanded paid time off & weekly bonuses. The improvements for associates resulted in a pre-tax charge of $850M (60¢ a share after taxes). EPS dropped to $2.08 as revenue rose 7.1% from a year ago to $28.3B. The forecast called for adjusted EPS of $2.27 on revenue of $27.5B. We took early & decisive action to intentionally limit customer traffic in our stores, which we believe had a significant impact to sales in many markets,” said CEO Craig Menear. “Even with these actions, the robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter.” Sales at stores open at least a year rose 6.4% from the previous year & were up 7.5% in the US. An 11% jump to $74.70 in the average sales ticket helped make up for a 3.9% drop in the number of transactions. Sales per square foot rose 7.2% to $466.58. HD declared a quarterly div of $1.50. The company withdrew its 2020 outlook due to uncertainty caused by the pandemic. The stock fell 4.59.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
US homebuilding dropped to a 5-year low in Apr, underlining fears that the novel coronavirus crisis would lead to the deepest economic contraction in Q2 since the depression. Housing starts tumbled 30.2% to a seasonally adjusted annual rate of 891K units last month, the lowest level since early 2015, the Commerce Dept reported. The forecast called for housing starts to fall to a pace of 927K units in Apr. Housing starts dropped 29.7% on a year-on-year basis in Apr & homebuilding fell in all 4 regions. Though many states considered homebuilding as essential when they enforced lockdown orders in mid-Mar to curb the spread of COVID-19, the respiratory illness caused by the coronavirus, disruptions to building material supply chains likely weighed on activity in the last couple of months. As the country gradually reopens, there are indications the worst of the homebuilding slump in likely over. A survey yesterday showed an increase in homebuilder confidence in May. With at least 21.4M people having lost their jobs in Mar & Apr, however, the housing market could remain subdued for a while even with mortgage rates near record lows. Permits for future home construction plunged 20.8% to a rate of 1.074M units in Apr. The housing market was back on the recovery path before the coronavirus pandemic struck, after hitting a soft patch that started in Q1-2018 & lasted thru Q2-2019. It has expanded for 3 straight qtrs. Economists are, however, expecting a sharp contraction in Q2. The housing market downturn, together with a collapse in consumer spending, business investment & manufacturing, is expected to result in GDP shrinking at as much as a 40% pace in Q2, the deepest since the 1930s. The economy contracted at a 4.8% rate in the Q1. Single-family homebuilding, which accounts for the largest share of the housing market, dropped 25.4% to a rate of 650K units in Apr. Single-family building permits declined 24.3% to a rate of 669K units in Apr.
Walmart (WMT) said that e-commerce & store sales grew significantly in Q1 as customers turned to the retailer for items from groceries to bicycles during the coronavirus pandemic. Customers' long stays at home & their precautions during the public health crisis shook up shopping patterns. Shoppers made fewer trips to the store, filled up bigger baskets & sought out staples, such as toilet paper & pasta sauce, instead of discretionary items like apparel. E-commerce sales in the US shot up by 74% & same-store sales grew 10% in Q1. The average ticket increased 16% but transactions dropped by about 6% during the qtr, CFO Brett Biggs said. CEO Doug McMillon said the company has worked hard to keep up inventory as customers have cleared some items from shelves, such as paper towels & surface cleaners, & skipped over others. “For many of these items we were selling in two or three hours what we normally sell in two or three days,” he added. For Q1 WMT reported EPS of $1,18, adjusted, on revenue of $134.6B. McMillon described 3 distinct parts of the qtr. Initially, customers stockpiled groceries & household essentials. Later, they bought puzzles, video games & bicycles to keep them entertained, office & exercise equipment to help them with their new routine at home & decor to improve their living spaces. At the end of the qtr, the retailer saw a bounce in spending as people got economic stimulus checks & bought more discretionary items, such as clothing, TVs & toys. “Not only have products and categories like hand sanitizer, disinfecting wipes and sprays, toilet paper, beef, and pork been hard to find but items such as laptops, office chairs, and fabric have been cleared out in some of our stores and online,” he said. “We’re working to recover our in-stock position as we begin the second quarter.” Despite beating expectations, WMT joined many other companies in withdrawing its financial outlook. Biggs said the virus has created “unprecedented variability” in the economy & added that many factors could influence sales, including the duration of the Covid-19 crisis, the amount of economic stimulus & consumer confidence. The retailer also announced that it is phasing out the Jet.com. The stock rose 92¢.
If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT?a_aid=CD3289&a_bid=6ae5b6f7
Stocks are digesting yesterday's huge advance. The early news on the new vaccine is very encouraging, but there are plenty of dark clouds around for investors to see. Demand for safe haven gold remains strong.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 32.80 | +0.98 | +3.1% |
| GC=F | Gold | 1,742.70 | +8.30 | +0.5% |
Home Depot's (HD), a Dow stock, Q1 profit slid 11% from a year ago as the company emphasized coronavirus safety measures & enhanced employee benefits. The home-improvement chain closed stores early beginning in mid-Mar to allow more time for sanitization & restocking essential products amid the COVID-19 pandemic & expanded paid time off & weekly bonuses. The improvements for associates resulted in a pre-tax charge of $850M (60¢ a share after taxes). EPS dropped to $2.08 as revenue rose 7.1% from a year ago to $28.3B. The forecast called for adjusted EPS of $2.27 on revenue of $27.5B. We took early & decisive action to intentionally limit customer traffic in our stores, which we believe had a significant impact to sales in many markets,” said CEO Craig Menear. “Even with these actions, the robust and flexible interconnected infrastructure that we have invested in for over a decade allowed us to quickly adapt to changing customer preferences and achieve strong sales performance in the quarter.” Sales at stores open at least a year rose 6.4% from the previous year & were up 7.5% in the US. An 11% jump to $74.70 in the average sales ticket helped make up for a 3.9% drop in the number of transactions. Sales per square foot rose 7.2% to $466.58. HD declared a quarterly div of $1.50. The company withdrew its 2020 outlook due to uncertainty caused by the pandemic. The stock fell 4.59.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot hit with $850 million virus-related charge, profit slides
US homebuilding dropped to a 5-year low in Apr, underlining fears that the novel coronavirus crisis would lead to the deepest economic contraction in Q2 since the depression. Housing starts tumbled 30.2% to a seasonally adjusted annual rate of 891K units last month, the lowest level since early 2015, the Commerce Dept reported. The forecast called for housing starts to fall to a pace of 927K units in Apr. Housing starts dropped 29.7% on a year-on-year basis in Apr & homebuilding fell in all 4 regions. Though many states considered homebuilding as essential when they enforced lockdown orders in mid-Mar to curb the spread of COVID-19, the respiratory illness caused by the coronavirus, disruptions to building material supply chains likely weighed on activity in the last couple of months. As the country gradually reopens, there are indications the worst of the homebuilding slump in likely over. A survey yesterday showed an increase in homebuilder confidence in May. With at least 21.4M people having lost their jobs in Mar & Apr, however, the housing market could remain subdued for a while even with mortgage rates near record lows. Permits for future home construction plunged 20.8% to a rate of 1.074M units in Apr. The housing market was back on the recovery path before the coronavirus pandemic struck, after hitting a soft patch that started in Q1-2018 & lasted thru Q2-2019. It has expanded for 3 straight qtrs. Economists are, however, expecting a sharp contraction in Q2. The housing market downturn, together with a collapse in consumer spending, business investment & manufacturing, is expected to result in GDP shrinking at as much as a 40% pace in Q2, the deepest since the 1930s. The economy contracted at a 4.8% rate in the Q1. Single-family homebuilding, which accounts for the largest share of the housing market, dropped 25.4% to a rate of 650K units in Apr. Single-family building permits declined 24.3% to a rate of 669K units in Apr.
US home-building drops more than expected in April
Walmart (WMT) said that e-commerce & store sales grew significantly in Q1 as customers turned to the retailer for items from groceries to bicycles during the coronavirus pandemic. Customers' long stays at home & their precautions during the public health crisis shook up shopping patterns. Shoppers made fewer trips to the store, filled up bigger baskets & sought out staples, such as toilet paper & pasta sauce, instead of discretionary items like apparel. E-commerce sales in the US shot up by 74% & same-store sales grew 10% in Q1. The average ticket increased 16% but transactions dropped by about 6% during the qtr, CFO Brett Biggs said. CEO Doug McMillon said the company has worked hard to keep up inventory as customers have cleared some items from shelves, such as paper towels & surface cleaners, & skipped over others. “For many of these items we were selling in two or three hours what we normally sell in two or three days,” he added. For Q1 WMT reported EPS of $1,18, adjusted, on revenue of $134.6B. McMillon described 3 distinct parts of the qtr. Initially, customers stockpiled groceries & household essentials. Later, they bought puzzles, video games & bicycles to keep them entertained, office & exercise equipment to help them with their new routine at home & decor to improve their living spaces. At the end of the qtr, the retailer saw a bounce in spending as people got economic stimulus checks & bought more discretionary items, such as clothing, TVs & toys. “Not only have products and categories like hand sanitizer, disinfecting wipes and sprays, toilet paper, beef, and pork been hard to find but items such as laptops, office chairs, and fabric have been cleared out in some of our stores and online,” he said. “We’re working to recover our in-stock position as we begin the second quarter.” Despite beating expectations, WMT joined many other companies in withdrawing its financial outlook. Biggs said the virus has created “unprecedented variability” in the economy & added that many factors could influence sales, including the duration of the Covid-19 crisis, the amount of economic stimulus & consumer confidence. The retailer also announced that it is phasing out the Jet.com. The stock rose 92¢.
If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT?a_aid=CD3289&a_bid=6ae5b6f7
Walmart earnings soar as e-commerce sales jump, shoppers flock to stores
Stocks are digesting yesterday's huge advance. The early news on the new vaccine is very encouraging, but there are plenty of dark clouds around for investors to see. Demand for safe haven gold remains strong.
Dow Jones Industrials
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