Dow finished 56 in a volatile trading day, advancers over decliners 3-1 & NAZ roared ahead 162. The MLP index was off a tad to 223 & REIT index rose 4+ to the 382s. Junk bond funds were in demand & Treasuries continued in demand, taking yields lower. Oil went up to the 86s & gold inched up 1 to 1778 (more on both below).
AMJ (Alerian MLP Index tracking fund)
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Households increased debt during Q3 at the fastest pace in 15 years due to hefty increases in credit card usage & mortgage balances, the Federal Reserve reported. Total debt jumped by $351B, the largest nominal quarterly increase since 2007, bringing the collective household IOU in the US to a fresh record $16.5T, up 2.2% from the previous qtr & 8.3% from a year ago. The increase follows a $310B jump in Q2 & represents a $1.27T annual increase. Debt has surged over the past year due to inflation running near its highest pace in more than 40 years & amid rising interest rates & strong consumer demand. The biggest contributors to that debt load came from mortgage balances, which rose $1T from a year ago to $11.7T & credit card debt, which climbed to $930B. The credit card balance collectively rose more than 15% from the same period in 2021, the largest annual jump in more than 20 years, according to the New York Fed. The increase “towers over the last eighteen years of data,” a group of Fed researchers said. “Credit card, mortgage, and auto loan balances continued to increase in the third quarter of 2022 reflecting a combination of robust consumer demand and higher prices,” said Donghoon Lee, economic research advisor at the New York Fed. “However, new mortgage originations have slowed to pre-pandemic levels amid rising interest rates.” New York Fed researchers attributed the credit card growth to “very robust” consumption, rising prices & consumers using substantial levels of savings that remain on accounts. Along with the rise in balances has come an increase in delinquencies. However, while “delinquency rates are rising, they remain low by historical standards and suggest consumers are managing their finances through the period of increasing prices,” the researchers wrote.
Household debt soars at fastest pace in 15 years as credit card use surges, Fed report says
Walmart (WMT). a Dow stock & Dividend Aristocrat, shares jumped
after it
reported strong Q3r profits & revenue amid the tumultuous
economic environment. The company also raised its full year outlook. The news,
considered a barometer of spending given its more than $400B market cap, bolstered the notion that an increasing number of
consumers are turning to the discount chain to cut down on spending amid
elevated inflation. Despite the strong qtr, the
company did take a financial hit. It agreed to pay
$3.1B to settle lawsuits nationwide over the impact of
prescriptions its pharmacies filled for powerful prescription opioid
painkillers. The agreement must still be approved by 43 states to take
effect. The company lost 66¢ per share, during Q3, including the opioid settlement. A
year ago, EPS was $1.11.
Adjusted EPS was $1.50 which handily beat
estimates for $1.32. Sales rose 8.7% to
$153B, which beat estimates of $148B. Sales in Walmart US stores open for at least a
year grew 8.2% & online sales rose 16%. CEO
Doug McMillon said the company "had a good quarter with strong top-line
growth globally led by Walmart and Sam’s Club U.S." As a result, Q3
performance. WMT expects 5.5% consolidated net sales growth for fiscal
2023, up from 4.5%. Excluding divestitures, growth is expected to come
in at 6.5%, up from 5.5%. US comparable store sales, excluding fuel is now estimated at 5.5%, compared to 3% previously estimated. Inflation, which remains elevated, is still presenting challenges for WMT & other retailers as low-income shoppers trim spending. The stock rose 9.09 (7%).
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 shares skyrocket after profits top Wall Street expectations
Home Depot (HD), a Dow stock, reported its Q3 revenue increased about 6% to
nearly $38.9B, beating expectations, as the retailer
continued to beckon customers despite rising costs & macroeconomic
pressures. EPS was $4.24, up
from $3.92 from last year. HD reaffirmed its full-year guidance ahead of the key holiday
quarter, noting it expects diluted EPS percentage growth
in the mid-single digits. The company also expects comparable store
sales to grow about 3% & an operating margin of approximately 15%. “We’re navigating a unique environment,” Home Depot CEO Ted Decker
said on Tuesday’s call with investors. “We can’t predict how the
macroeconomic backdrop will affect customers going forward.” Despite
this, he added the company believes demand will remain strong,
especially as consumers continue to stay home more than usual. The
typical customer is still able to afford home improvement
projects, he added. HD said that while its customer
transactions were down slightly more than 4%, its average ticket prices
rose about 9% to $89.67. The company also said its sales per retail
square foot rose 5%. CFO Richard McPhail noted
the company is being faced with an “inflationary environment not seen
in four decades,” in addition to managing supply chain issues and a
global shift in monetary policy. The stock rose 5.20.
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 posts better-than-expected quarter despite inflation
Gold prices closed flat, but were climbing after the session settlement, following reports that Russian missiles crossed into NATO member Poland, killing 2 people. Gold prices for Dec fell to settle at $1776 per ounce. Prices were up to $1779 an ounce in extended trading, after touching a high of $1791, the highest intraday level for a most-active contract since Aug 17. Russian missiles crossed into NATO member Poland, killing 3 people, according to a senior US intelligence official. The news service also reported that Polish gov spokesman Piotr Mueller didn't immediately confirm the information, but said top leaders were holding an emergency meeting due to a “crisis situation.” Some of the moves for the $ briefly were unwound, following the inflation report. The ICE US Dollar Index DXY, -0.23% was up less than 0.1% at 106.72 today.
Gold ends session flat, but edges higher after hours, on reports of Russian missiles hitting Poland
Oil futures closed higher, shaking off early losses that pulled prices for global & US benchmark crude to their lowest intraday levels in 3 weeks, as traders continued to weigh prospects for oil demand. Signs of a crimp to supplies offered some futures price support. In a report, the International Energy Agency (IEA) warned of tighter global supplies ahead as the EU's ban on Russian oil goes into effect in early Dec. And the $'s fortunes, with the buck in a strengthening trend after a 6-week slide, was impacting US commodity markets, including oil & gas. West Texas Intermediate (WTI) crude for Dec settled up $1.05 (1.2%) to $86.92 a barrel after losing 3.5% yesterday when it touched a low of $84.06. Jan Brent crude climbed by 72¢ (0.8%) at settlement, to $93.86 a barrel after trading as low as $91.53. Prices for the front-month Brent & WTI contracts both tapped their lowest intraday levels since Oct 25. The IEA said that more than 1M barrels a day of Russian oil exports will be upended within weeks, with a European ban on Russia crude oil imports & a plan to cap prices for Russian crude-oil sales go into effect. The agency also raised its global oil demand forecast for this year by 170K barrels a day to 99.8M barrels a day & for next year by 130K barrels a day to 101.4M barrels a day. The IEA report followed the release of OPEC's monthly oil report yesterday. OPEC modestly revised lower its forecast for growth in global oil demand by 100K barrels a day to 2.5M barrels a day, while making small tweaks to its supply forecasts & holding off from making changes to its global economic growth forecasts.
Oil futures settle higher after touching their lowest prices in 3 weeks
Dow began trading up 450 but that didn't last. There was midday selling, taking it into the red. Buyers returned to raise the Dow in the PM to a modest gain. No shortage of excitement with the PPI report, a possible missile attack into Poland & new forecasts for oil demand in 2022. Tonight investors will have plenty of news to digest,
Dow Jones Industrials
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