Articles for tag: Earnings, Investing, Stocks

May 10, 2024

Ron Finklestien

Retail Earnings Loom: What to Expect

Walmart WMT shares held their own in last month’s market weakness, cementing its anchoring and defensive positioning, particularly relative to Target TGT and Home Depot HD. From the market’s March 28th peak through the end of April 2024, the S&P 500 index lost -3.8% of its value, while Walmart was down only -1.4%. Target lost -9.2% of its value during that same period, while Home Depot shares were down -12.9%. Walmart’s defensive attributes reflect the retailer’s heavy grocery exposure and reputation for value. Walmart’s value orientation and well-executed digital strategy have been key to gaining grocery market share by attracting

March 22, 2024

Ron Finklestien

Anticipating Q1 Earnings Insights Anticipating Q1 Earnings Insights

Tracking Consumer Giants’ Performance Steering through the financial landscape requires a keen eye, especially in the weeks preceding the customary barrage of quarterly earnings releases. As the curtain lifts on the latest reporting season, recent murmurs from the halls of Oracle and Adobe have piqued interest, offering a sneak peek into the impending Tech sector revelations. Yet, the limelight now swivels towards the consumer arena, with behemoths like Nike NKE and Lululemon LULU taking center stage. Gauging Market Sentiment Analyze the charts they say; it tells a tale that numbers sometimes can’t articulate. The recent spate of pessimism stemming from

February 28, 2024

Ron Finklestien

Striking Disparity in Earnings Performance: Big vs Small Caps

A Glimpse Into Earnings Season Trends As the curtain nears on Q4 earnings season, a tale of two sectors unfolds. With 95% of S&P 500 companies declaring their results, it’s evident that large caps have emerged as the victors, defying initial projections. Instead of a contraction, Q4 earnings have showcased a growth of +3.9% YoY. Impressively, three-quarters of S&P 500 firms have exceeded earnings estimates, aligning closely with the 5-year average. Struggles Persist for Small Caps In stark contrast, smaller players have faced a tougher road to recovery. The S&P 400 mid-caps are on the brink of exiting their earnings

February 16, 2024

Ron Finklestien

Retail Industry Outlook: Finding Balance Among the Numbers Retail Industry Outlook: Finding Balance Among the Numbers

Walmart WMT shares took a hit in response to the latest quarterly release on November 16th when the company offered guidance that fell slightly short of expectations. The period of tumultuous trading that followed saw the stock lose over 10% of its value. However, in a marked turnaround, Walmart shares have since rebounded and are presently trading at a 52-week high, outperforming the market by a significant margin since the beginning of January 2024. The upcoming quarterly results on Tuesday, February 20th will reveal whether this performance momentum can be sustained. It wouldn’t be surprising to witness a ‘sell-the-news’ reaction,

February 15, 2024

Ron Finklestien

Market Reacts to CPI Data | Nasdaq Investor Panic Grips Market as CPI Data Drives Selloff

Market Meltdown Wednesday’s CPI report triggered a market selloff, particularly hitting small caps. Both the Nasdaq-100 ETF and Nasdaq Mid-Caps ETF fell nearly 2% yesterday, while the Nasdaq Small-Caps ETF plummeted by 5.5%. The disappointing report also led to a rise in rates, with 10-year Treasury yields climbing 15bps to 4.3%. This pushed back the expectations for the first Fed rate cut to June from May. The bigger selloff in small caps can be attributed to their higher sensitivity to rate changes due to having more floating-rate debt. Troublesome Inflation The disappointment in the CPI report stemmed from the fact

February 6, 2024

Ron Finklestien

Recent Bond Yield Surge and Its Implications Recent Bond Yield Surge and Its Implications

Surge in Treasury Yields If the latest rumblings in bond markets have not caught your attention, it might come as a shock that the 10-year Treasury yields have rallied to 4.1%, up from 3.9% just a week prior. Correspondingly, mortgage rates have ascended above 7%, a steep climb from their recent low of 6.6%. What catalysts are driving this sharp upswing? Economy’s Unpredicted Strength In essence, almost all the fresh economic data in 2024 has delivered surprising robustness. This is evidently reflected in Citi’s Economic Surprise Index, which gauges the disparity between actual economic performance and its projections. The Index

February 2, 2024

Ron Finklestien

Magnificent 7 Companies Reign Superior with Solid Earnings Results Magnificent 7 Companies Reign Superior with Solid Earnings Results

We’ve seen awe-inspiring results from three major players in the stock market: Microsoft MSFT, Meta Platforms META, and Amazon AMZN, solidifying their position as leaders in this domain. These companies, along with their counterparts in the ‘Magnificent 7’ group of stocks – Apple AAPL, Alphabet GOOGL, Tesla TSLA, and Nvidia NVDA – led the market to new heights last year, and this momentum has continued in the current year. Despite a disappointing performance by Tesla, reflecting the fourth consecutive quarter of unsatisfactory results, all other members of the ‘Mag 7’ that have reported have posted impressive growth numbers. Although the

February 2, 2024

Ron Finklestien

Fed Pause Has Tightened Monetary Policy

Fed’s Monetary Policy Tightens Amidst Uncertainty of Rate Cuts Fed’s March Rate Cut Markets were disappointed by Chair Powell saying March is not the Fed’s base case for its first rate cut at its recent Fed meeting. The Fed wants to see more progress on inflation, even though headline PCE inflation – the metric for the Fed’s 2% target – is already down to 2.6% YoY and core PCE is down to 2.9% YoY. Delay in Rate Cuts Markets are now pricing the first rate cut in May. If they’re right, the Fed will have gone 10 months between its last hike

January 26, 2024

Ron Finklestien

The Future of Big Tech: Navigating Earnings Projections and AI Prospects

Positive Momentum in Tech Sector In the wake of last year’s exceptional performance, tech stocks continue to maintain their market dominance in the New Year, buoyed by favorable macroeconomic developments and a renewed confidence in the Federal Reserve’s policy trajectory. Investors are increasingly optimistic about the potential of artificial intelligence (AI) and, despite lingering doubts reminiscent of the late 1990s, there is a growing sense of overcoming prior obstacles in tech spending. As a result, companies across the sector are anticipated to report robust December-quarter results, shedding light on business spending trends, with a particular focus on cloud services. The

January 24, 2024

Ron Finklestien

The Market’s Mercurial Dance with Elections and Macro Factors

The Undercurrents of Political Uncertainty The 2024 presidential election is well underway, with the recent Iowa caucuses and the New Hampshire primary setting the stage. It’s a common misconception that the impact of elections on markets only becomes apparent close to the actual election date in November. In reality, the influence of elections on the market landscape can manifest much earlier, permeating through various sectors and asset classes. Vying Futures The fortunes of sectors and asset classes are subject to the ebb and flow of election outcomes. Uncertainty tends to cast a shadow over markets, and the prospect of different