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Pre-market futures are lower to start a new week of trading, following a down week for the Nasdaq and two straight for the Dow and S&P 500. For the most part, markets had powered through a weak-to-middling Q4 earnings season. But as valuations steepened, investors have since gotten cold feet; without much clarity ahead on interest rates, inflation levels, etc. it’s tough to have a good feel how high markets might drift on hopes inflation will have been snuffed out this year. And Q4 earnings season is not yet finished, as you will see below.
Anyway, the Dow is -350 points at this hour, with the S&P -40 and the Nasdaq -150 points. We won’t see any important economic reports until after the opening bell — when S&P flash PMI Manufacturing and Services come out — but downward sentiment might be on the less-than-stellar big-box retailers having reported Q4 earnings (quarter ended January) earlier this morning.
Walmart (WMT - Free Report) beat estimates on both top and bottom lines, and by solid margins over Zacks consensus estimates: earnings of $1.71 per share easily swept past the $1.52 expected (and $1.53 per share in the year-ago quarter) for a +12.5% outperformance. Revenues of $164.05 billion surpassed the $159.66 billion analysts were looking for. Inventories have gotten back to a healthy equilibrium after the post-Covid challenges. Yet the stock is selling off -3% on the news.
This is because full-year guidance for America’s biggest big-box is now ratcheted down to a $5.90-6.05 per share range. The Zacks consensus prior to the earnings print had been for $6.49 per share, so we can expect estimates to revise downward — and take its current Zacks Rank #3 (Hold) down with it. Shares are now close to flat on the year following the earnings report.
Meanwhile, Home Depot (HD - Free Report) posted its first revenue miss since November 2019 this morning, where fiscal Q4 sales totals of $35.83 billion missed expectations by -0.21%. Earnings beat estimates by 3 cents to $3.30 per share, keeping its string of 11-straight earnings beats intact. Shares are trading down -4% in this challenging early market, however, swinging year-to-date tallies into the red for the big-box specialty retailer.
Otherwise in this holiday-shortened week, we’ll get to read the Fed minutes from the latest FOMC meeting tomorrow and see a first revision to Q4 GDP, which was an impressive +2.9% the first time around. On Friday we get the big Personal Consumer Expenditures (PCE) report, which hopefully continues to track downward steadily toward +2%, the Fed’s optimum inflation level. Last time around, core PCE year over year was still +4.4%.
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Pre-Markets in Red on Higher Rate Fears
Pre-market futures are lower to start a new week of trading, following a down week for the Nasdaq and two straight for the Dow and S&P 500. For the most part, markets had powered through a weak-to-middling Q4 earnings season. But as valuations steepened, investors have since gotten cold feet; without much clarity ahead on interest rates, inflation levels, etc. it’s tough to have a good feel how high markets might drift on hopes inflation will have been snuffed out this year. And Q4 earnings season is not yet finished, as you will see below.
Anyway, the Dow is -350 points at this hour, with the S&P -40 and the Nasdaq -150 points. We won’t see any important economic reports until after the opening bell — when S&P flash PMI Manufacturing and Services come out — but downward sentiment might be on the less-than-stellar big-box retailers having reported Q4 earnings (quarter ended January) earlier this morning.
Walmart (WMT - Free Report) beat estimates on both top and bottom lines, and by solid margins over Zacks consensus estimates: earnings of $1.71 per share easily swept past the $1.52 expected (and $1.53 per share in the year-ago quarter) for a +12.5% outperformance. Revenues of $164.05 billion surpassed the $159.66 billion analysts were looking for. Inventories have gotten back to a healthy equilibrium after the post-Covid challenges. Yet the stock is selling off -3% on the news.
This is because full-year guidance for America’s biggest big-box is now ratcheted down to a $5.90-6.05 per share range. The Zacks consensus prior to the earnings print had been for $6.49 per share, so we can expect estimates to revise downward — and take its current Zacks Rank #3 (Hold) down with it. Shares are now close to flat on the year following the earnings report.
Meanwhile, Home Depot (HD - Free Report) posted its first revenue miss since November 2019 this morning, where fiscal Q4 sales totals of $35.83 billion missed expectations by -0.21%. Earnings beat estimates by 3 cents to $3.30 per share, keeping its string of 11-straight earnings beats intact. Shares are trading down -4% in this challenging early market, however, swinging year-to-date tallies into the red for the big-box specialty retailer.
Otherwise in this holiday-shortened week, we’ll get to read the Fed minutes from the latest FOMC meeting tomorrow and see a first revision to Q4 GDP, which was an impressive +2.9% the first time around. On Friday we get the big Personal Consumer Expenditures (PCE) report, which hopefully continues to track downward steadily toward +2%, the Fed’s optimum inflation level. Last time around, core PCE year over year was still +4.4%.