Dow was off 27, advancers slightly ahead of decliners & NAZ pulled back 67. The MLP index added 1 to the 235s & the REIT index went up 1+ to the 362s. Junk bond funds saw limited selling & Treasuries had more selling which raised yields (more below). Oil recovered 1+ to 81 & gold slid back 2 to 1925.
AMJ (Alerian MLP Index tracking fund)
Treasury yields were mixed as investors digested minutes from the Federal Reserve's latest meeting & considered the outlook for inflation & interest rates. The yield on the 10-year Treasury was 3 basis points higher at 4.288%, its highest level since Oct 2022, & the 2-year Treasury was last down by 3 basis points at 4.95%. Yields & prices have an inverted relationship & one basis point is equivalent to 0.01%. Policymakers noted that concerns about inflation remained & could prompt them to tighten monetary policy depending on the state of the economy, meaning additional rate hikes could be ahead. That comes as many investors have been hoping, & anticipating, that the Fed's 25 basis point rate increase at the Jul meeting marked the end of the central bank's rate-hiking campaign. The Fed has been increasing rates since early 2022 in an effort to cool the economy & bring inflation back to its 2% target range. In Jul's meeting minutes, Fed officials noted that inflation was still too high, but there were signs that pressures from higher prices are easing.
10-year yield rises to highest level since October 2022
Business is booming at Walmart (WMT), a Dow stock & Dividend Aristocrat, & CEO Doug McMillon is crediting in-store & online shoppers for the gains. "They’re shopping with us across channels – in stores, Sam’s Clubs,
and they’re driving e-commerce, which was up 24% globally. Food is a
strength, but we’re also encouraged by our results in general
merchandise versus our expectations when we started the quarter" he
noted. The world's biggest retailer boosted its outlook for the
next fiscal year & expects to earn as much as $6.46 per share vs prior
estimate of $6.20. Sales may rise as much as 4.5% from an
expected 3.5%. The current qtr included a 6.4% jump in comparable sales & a
$162B in consolidated revenue & 5.7% improvement from the
same period one year ago. As consumers pull back on spending amid higher interest rates led by the Federal Reserve's
mission to control inflation, sales strength were led by
grocery, health & wellness, while general merchandise sales declined
slightly. year & now expects to earn as much as $6.46 per share vs.
prior estimate of $6.20 per share. Sales may rise as much as 4.5% from
an expected 3.5%. "We are positioned for growth. We can serve people how they want to be
served whether that’s in a store or club, picking up an order curbside
or having it delivered" McMillon added. Also in Q2, WMT reported $18.2B in operating
cash flow, an increase of $9B & another $9B in free
cash flow to notch an increase of $7.2B. The stock fell 2.29.
If you would like to learn more about WMT, click on this link:
club.ino.com/trend/analysis/stock/WMT_aid=CD3289&a_bid=6aeoso5b6f7
Walmart raises outlook as food, online sales boom |
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Global smartphone shipments this year are on track to be the worst in a decade, Counterpoint Research said in a report, as the market is dragged down by the US & China. However, Apple (AAPL), a Dow & NAZ stock, could become the biggest player in smartphones this year by shipments, as its high-end iPhone sales remain resilient. Measuring expected demand, shipments are not equivalent to sales & represent the number of devices that smartphones vendors send to retailers. Counterpoint Research expects smartphone shipments in 2023 to decline 6% year-on year to 1.15B devices. “Asia is one of the major hurdles to positive growth, as headwinds halt the economic turnaround anticipated for China at the start of the year, and the broader region experiences intensifying declines across emerging markets,” Counterpoint added. China's economy this year has sputtered & not lived up to expectations of a rapid recovery, while consumers remain cautious on spending. Chinese smartphone purchases, which used to average 450M devices a year at their peak, have shrunk to 270M per year, contributing as a major cause behind the decline in global smartphone sales. North America continues to dampen the global recovery, with a “disappointing” H1 setting the region up for double-digit full-year declines, the report said. “Despite strength in the jobs market and inflation falling, consumers are hesitant to upgrade their devices, pushing replacement rates for the US and globally to record highs,” the research firm added. The premium end of the market with higher priced devices has remained quite resilient, despite a fall in overall smartphone shipments.
Global smartphone market to hit decade low in 2023 but Apple could take top spot
Earnings reports from retailers have been uneven & are considered to be unimpressive. Stocks continue to struggle as they hope for investors to regain a risk averse attitude.
Dow Jones Industrials
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