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Big-Box Retail Earnings, Jackson Hole Highlight Trading Week
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Monday, August 19th, 2024
Last week was a shot in the arm for market participants craving stability. After a tumultuous previous two weeks — the Fed held firm at interest rates of 5.25-5.50% just as the U.S. labor market looked on the verge of collapse — it was nice to see economic figures and earnings results demonstrate a still-healthy economy with downward trajectories looking more like the “soft landing” the Fed has attempted to engineer.
Friday’s trading showed the major three indexes uniformly aligned: the Dow closed +0.24%, the Nasdaq +0.21% and the S&P 500 +0.20%. As of this hour in pre-market trading, the Dow is up another +14 points, the S&P +6 and the Nasdaq +26 points. Without blowing the doors off the market, we’re nicely above August 8th lows currently.
Q2 Earnings Season Shifts to Big-Box Retail: TGT, M, LOW
While we’ve already seen earnings reports from retailers like Walmart (WMT - Free Report) and Home Depot (HD - Free Report) this quarter, this week brings us Target (TGT - Free Report) , Macy’s (M - Free Report) and Lowe’s (LOW - Free Report) , among others. While Macy’s and Lowe’s are both anticipated to bring in lower quarterly revenues than a year ago — and carry Zacks Rank #4 (Sell) ratings currently — Target expects both earnings and sales to be positive, and has a Zacks Rank #3 (Hold).
Estee Lauder (EL - Free Report) shares have swung to the green following its fiscal Q4 report out this morning, as the company beat on earnings by +156%: 64 cents per share versus 25 cents expected (and a mere $0.07 per share in the year-ago quarter). Revenues of $3.87 billion beat the Zacks consensus by +0.99%. But weakness in China and the stepping down of CEO Fabrizio Freda (not long after CFO Tracey Travis announced her retirement from the company) added to the woes of Estee Lauder stock year to date, where it is down more than -30%. For more on EL’s earnings, click here.
What to Expect This Monday
It’s a slower week for economic prints at the same time as calendar Q2 earnings season starts to dim. Such is the late-August trading environment. After today’s open, we will see U.S. Leading Economic Indicators for July, which are expected to sing to a negative -0.4% from the previous month’s read of +0.2%. More grist for the “soft landing” mill? We’ll find out.
After the close of regular trading today, cybersecurity staple Palo Alto Networks (PANW - Free Report) reports fiscal Q4 results. The Zacks Rank #2 (Buy)-rated stock, now measuring up against tough comps year over year, is expected to come in -2% on earnings but +10.7% on revenues. The company literally does not miss on earnings; we don’t expect it to do so this afternoon.
What’s in Store the Rest of the Week
The annual Jackson Hole Economic Symposium is this week, capped by a speech Friday morning from Fed Chair Jerome Powell. This address becomes something of a proxy between Federal Open Market Committee (FOMC) meetings, which do not officially resume until mid-next month — when the first interest rate cut in more than a year is highly anticipated. Analysts will be parsing Powell’s verbiage closely for signs of either a 25 basis point (bps) cut or a 50 bps cut.
Speaking of the FOMC, minutes from the July 30-31 meeting will be released on Wednesday of this week. This will be practice for rate-cut lookouts on Friday, although a number of years on the job has made Powell eminently careful with how he describes economic conditions. After all, it was his speech at Jackson Hole in 2021 were he infamously said inflation was merely “transitory,” leading to a delay in rate hikes until spring of the next year. Questions or comments about this article and/or author? Click here>>
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Big-Box Retail Earnings, Jackson Hole Highlight Trading Week
Monday, August 19th, 2024
Last week was a shot in the arm for market participants craving stability. After a tumultuous previous two weeks — the Fed held firm at interest rates of 5.25-5.50% just as the U.S. labor market looked on the verge of collapse — it was nice to see economic figures and earnings results demonstrate a still-healthy economy with downward trajectories looking more like the “soft landing” the Fed has attempted to engineer.
Friday’s trading showed the major three indexes uniformly aligned: the Dow closed +0.24%, the Nasdaq +0.21% and the S&P 500 +0.20%. As of this hour in pre-market trading, the Dow is up another +14 points, the S&P +6 and the Nasdaq +26 points. Without blowing the doors off the market, we’re nicely above August 8th lows currently.
Q2 Earnings Season Shifts to Big-Box Retail: TGT, M, LOW
While we’ve already seen earnings reports from retailers like Walmart (WMT - Free Report) and Home Depot (HD - Free Report) this quarter, this week brings us Target (TGT - Free Report) , Macy’s (M - Free Report) and Lowe’s (LOW - Free Report) , among others. While Macy’s and Lowe’s are both anticipated to bring in lower quarterly revenues than a year ago — and carry Zacks Rank #4 (Sell) ratings currently — Target expects both earnings and sales to be positive, and has a Zacks Rank #3 (Hold).
Estee Lauder (EL - Free Report) shares have swung to the green following its fiscal Q4 report out this morning, as the company beat on earnings by +156%: 64 cents per share versus 25 cents expected (and a mere $0.07 per share in the year-ago quarter). Revenues of $3.87 billion beat the Zacks consensus by +0.99%. But weakness in China and the stepping down of CEO Fabrizio Freda (not long after CFO Tracey Travis announced her retirement from the company) added to the woes of Estee Lauder stock year to date, where it is down more than -30%. For more on EL’s earnings, click here.
What to Expect This Monday
It’s a slower week for economic prints at the same time as calendar Q2 earnings season starts to dim. Such is the late-August trading environment. After today’s open, we will see U.S. Leading Economic Indicators for July, which are expected to sing to a negative -0.4% from the previous month’s read of +0.2%. More grist for the “soft landing” mill? We’ll find out.
After the close of regular trading today, cybersecurity staple Palo Alto Networks (PANW - Free Report) reports fiscal Q4 results. The Zacks Rank #2 (Buy)-rated stock, now measuring up against tough comps year over year, is expected to come in -2% on earnings but +10.7% on revenues. The company literally does not miss on earnings; we don’t expect it to do so this afternoon.
What’s in Store the Rest of the Week
The annual Jackson Hole Economic Symposium is this week, capped by a speech Friday morning from Fed Chair Jerome Powell. This address becomes something of a proxy between Federal Open Market Committee (FOMC) meetings, which do not officially resume until mid-next month — when the first interest rate cut in more than a year is highly anticipated. Analysts will be parsing Powell’s verbiage closely for signs of either a 25 basis point (bps) cut or a 50 bps cut.
Speaking of the FOMC, minutes from the July 30-31 meeting will be released on Wednesday of this week. This will be practice for rate-cut lookouts on Friday, although a number of years on the job has made Powell eminently careful with how he describes economic conditions. After all, it was his speech at Jackson Hole in 2021 were he infamously said inflation was merely “transitory,” leading to a delay in rate hikes until spring of the next year.
Questions or comments about this article and/or author? Click here>>