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Market Moves Yesterday
S&P 500 @ 5,297.10 ( ⬇️ 0.21%)
Nasdaq Composite @ 16,698.32 ( ⬇️ 0.26%)
Bitcoin @ $66,330.13 ( ⬆️ 1.66%)
Hey Scoopers,
TGIF! Here’s what we’re covering today:
👉 Walmart crushes estimates
👉 Dow Jones tops 40k
👉 Retail stocks offer a tepid outlook
So, let’s go 🚀
Market Wrap 📉
The Dow Jones briefly touched the 40,000 threshold before closing lower on Thursday. At its high, the blue-chip average reached 40,051, the culmination of a bull run that began in October 2022.
Amazon, which joined the Dow index in Q1 was among the top-performers in 2024, rising over 20% year-to-date. Other notable names include American Express and Goldman Sachs which are up 29% and 20% respectively in 2024.
Big box retailer Costco rose 1% to trade over $804 for the first-time ever. The retail giant merged with Price Club in 1993 and traded around $10 per share.
The late Charlie Munger was an early investor and a big advocate of Costco. Munger was bullish on Costco due to its membership business and rewards program as well as its operating efficiency.
Trending Stocks 🔥
Meme stocks - GameStop and AMC retreated for the second consecutive session falling 30% and 15% respectively on Thursday.
Meta- The tech giant pulled back by 1.7% after the EU (European Union) initiated a probe regarding child safety concerns on social media platforms.
Deere - Shares slipped close to 5% after the agricultural equipment manufacturer cut its full-year guidance. It now expects a net income of $7 billion, lower than its prior midpoint forecast of $7.25 billion for 2024.
Walmart Stock at All-Time High
Shares of Walmart popped 7% following its fiscal Q1 (ended in April) results. The company reported:
Revenue of $161.51 billion vs. estimates of $159.5 billion
Earnings per share of $0.60 vs. estimates of $0.52
The discount retailer made significant gains in verticals such as e-commerce while its ad business continues to gain traction. Walmart now expects to hit the higher-end of its full year guidance where it forecast sales growth of 4% and earnings of $2.37 per share.
Walmart emphasized its grocery business was performed well due to the widening gap between the cost of cooking at home and eating out. Its around 4.3x more expensive to eat out than at home which meant customers are turning to grocery aisles for cheaper meals.
Walmart is the largest retailer and private employer in the U.S. and is viewed as a bellwether for the country’s economy. Yet, it has performed well despite rising costs as it sells staples such as groceries at discounted prices.
Here are few key numbers for Walmart in Q1:
Same-store sales rose by 3.8%
E-Commerce sales grew by 22% due to store pickup and online orders
Global ad business rose by 24%
Marketplace sellers in the U.S. increased by 36%
Walmart’s third-party marketplace is a key driver for the company going forward. Walmart has expanded its online business, diversifying its revenue base by offering ad and fulfilment services to sellers.
Walmart stock cloes at all-time highs and is up 22% in 2024, beating the S&P 500 gains of 11% year-to-date.
Is Consumer Spending Slowing?
Retailers such as Walmart, Under Armour and Canada Goose surpassed estimates in the recent quarter. But each of these companies provided a disappointing outlook.
Walmart forecasts Q2 earnings between $0.62 and $0.65 per share, in line with estimates of $0.64, despite posting its biggest earnings beat in three years.
Under Armour cut its profit forecast for fiscal 2025 to between $0.18 and $0.21 per share, much below its prior estimate of $0.59 per share. The company also expects a double-digit decline in sales due to lower wholesale demand.
Canada Goose crushed estimates in fiscal Q4 but its oulook for the upcoming year is far more tempered due to lower consumer spending.
The apparel maker expects earnings to grow at mid-teens, lower than Wall Street estimates of 20.6%. Its sales is forecast to grow at low-single-digits below estimates of 8.1%.
Canada Goose has withdrawn its long-term financial targets due to a challenging consumer spending environment.
This tiny company has all but cemented itself in the future list of bitcoin mining giants.
An industry shakeup of environmental regulations could spell catastrophe for others, while this company begins to soar.
The underlying factors?
Cheap production and carbon neutral mining.
But that’s just the start of it.
Subscribe to Bullseye Trade to learn more.
Ad Stocks Are on Fire
Ad-tech stocks popped on Thursday after Netflix announced plans to roll out its own ad platform and partner with Google Display, The Trade Desk, and Magnite.
While The Trade Desk added 3.3%, Magnite stock rallied 22% and headed for its best day since November 2022.
This partnership could be crucial driver for ad-tech stocks and could add $500 million in gross billings for The Trade Desk.
Headlines You Can't Miss!
China consumption slows as retail sales data disappoint
India’s regulators continue to introduce new rules for investors
China is still a critical global supplier
Gold and silver may continue to rally
North Korea laundered $147 million via Tornado Cash
Chart of The Day
After touching a peak of 8.7% in 2022, global inflation is expected to fall to 5.9% in 2024 and to 3.7% in 2026.
The big question is if inflation will decline enough to trigger multiple interest rate cuts. The Fed has held rates at elevated levels for three quarters to offset inflation.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.