Dow went up 155, butdecliners over advancers 4-3 & NAZ was down 64. The MLP index added 1+ to the 215s & the REIT index was steady in the 453s. Junk bond funds dipped lower & Treasuries were sold bringing higher yields (more below). Oil slid back 1+ to 88 & gold was off 5 to 1792.
AMJ (Alerian MLP index tracking fund)
Walmart (WMT), a Dow stock & Dividend Aristocrat, forecast a smaller drop in annual profit than it had predicted less
than a month ago, after deep discounts to clear excess merchandise & a
drop in fuel prices helped it beat expectations for quarterly sales. Last month it slashed its profit forecast & warned that consumers were pulling back
on discretionary purchases at a far greater pace than feared as higher
prices for everything from toothpaste to gas hampered their spending
power. That forced WMT to make steep price cuts on items such
as apparel to try to reduce more than $61B worth of inventory it
was sitting on at the end of Q2. Walmart reported inventories of $60B at the end of Q2 that was still 25% above last year's levels. "The actions we've taken to improve inventory levels
in the US, along with a heavier mix of sales in grocery put pressure
on profit margin for Q2 and our outlook for the year," CEO Doug McMillon said. WMT now expects fiscal 2023 adjusted EPS to fall 9-11%, compared with its previous forecast of a 11-13% decline. Total revenue rose 8.4% to $1523B, helped by demand for food & other essential items. The forecast was for revenue of $151. However,
discounts on discretionary products, slowing demand for high-margin
items such as appliances, electronics & clothes, & rising labor
costs led to a 6.8% fall in operating income to
$6.8B. The stock went up 7.48 (6%).
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 expects smaller profit drop as discounts drive demand
Home Depot (HD), another Dow stock, quarterly comparable sales above estimates on steady demand for home-improvement goods from builders & handymen. Analysts have said demand from home-improvement professionals has been strong, even as do-it-yourself customers are reining in their spending, due to a healthy pipeline of remodeling work. Around
40-45% of its customers are professionals, compared with
just 20-25% for smaller rivals. Comparable sales
rose 5.8% for Q2, above the 4.9%
growth expected. Net sales climbed 6.5% to
a $43.8B, compared with estimates of $43.4B. Higher product prices
drove average spending per transaction up more than 9%, even as
customer transactions at its stores dropped 3%, helping the company
record its highest ever quarterly sales & earnings. EPS rose to $5.05 in Q2, from $4.53, a year
earlier. The forecast called for $4.94. The stock jumped 12+ (4%).
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 beats quarterly comparable sales estimates
Bonds rose on amid the release of fresh housing & manufacturing data. The
yield on the benchmark 10-year Treasury note was up nearly 8 basis
points to 2.868% & the yield on the 30-year Treasury bond traded more
than 7 basis points higher at 3.162%. The yield on the shorter-term
2-year Treasury note was also up roughly 3 basis points at 3.237%. Yields move inversely to prices & a basis point is equal to 0.01%. The data today showed a 9.6% decline in
housing starts from Jun, well above the expected 2.5% drop as
anticipated & building permits
slipped 1.3% but beat estimates. Investors have closely watched
the data for further clues into the state of the housing market industry& insight into the construction industry’s reaction to a demand slowdown that’s been reported since Jun.
Bond yields rise following big data releases
Dow Jones Industrials
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