Stock Bulls Remain Optimistic As Data Indicates a Slowdown in Manufacturing Inflation

Stock bulls remain extremely cautious but a bit more optimistic as data indicates a slowdown in manufacturing inflation. The Producer Price Index rose +11% year-over-year in April, higher than expected but a meaningful pullback from March’s +11.5%. Producer prices lead consumer prices, so the report is a good sign overall, though investors, as well as the Fed, will need to see a couple more months of declines before declaring that inflation is indeed cooling.

Inflation

Economists also warn that goods inflation may be coming down because consumer demand is shifting more to services, meaning high prices could simply be moving from one part of the economy to another. The latest data shows services prices are rising at the fastest rate in three decades with airfare leading the way. Even if inflation has peaked, the question now is, how long will it remain elevated?

Federal Reserve Chair Jerome Powell cautioned yesterday that he can’t guarantee the central bank can deliver a so-called “soft landing” for the economy, pointing to the tight labor market and ongoing supply chain dislocations. Powell also stressed that other “huge events” are playing important roles right now, including Russia’s war in Ukraine, that are beyond the Fed’s control. Powell made the comments after being confirmed by the Senate for a second 4-year term.

The central bank’s target inflation rate is still a “flexible +2%” but several officials have indicated that the new normal might be more in the +2.5% to +3% range. One of the main gauges (but not the only one) the Fed uses to determine the rate of inflation is the Core PCE Prices Index, which for March was running at +5.2%. The April read is due out on May 27, which is a couple weeks ahead of the Fed’s next meeting on June 14-15.

Data to watch

Consumer data recently has been sending mixed signals that are hard to interpret. Sentiment has been mostly falling since the start of the year but consumer spending has not shown any signs of pullback.

Next week, investors get an update on how spending is holding up via April Retail Sales on Tuesday. A slew of fresh housing data next week will provide a deeper look at how substantially higher mortgage rates might be impacting the market. The NAHB Housing Market Index for May is out on Tuesday, followed by April Housing Starts on Wednesday, and April Existing Home Sales on Thursday.

Several key earnings are on the calendar next week as well, including Home Depot and Walmart on Tuesday; Cisco, Lowe’s, Target, and TJX Companies on Wednesday; Applied Materials, Palo Alto Networks, and Ross Stores on Thursday; and Deere & Co. on Friday.

Best Retail Stocks To Buy In May

Key Insights

  • Traders stay focused on finding safe-haven plays as S&P 500 is testing yearly lows. 
  • Leading retail stocks received strong support this year. 
  • Analyst estimates for Walmart and Dollar Tree remain stable, making the stocks more attractive after the recent pullback. 

Some retail stocks continue to outperform the market. While S&P 500 is down by more than 15% year-to-date, Walmart and Dollar Tree gained ground in 2022 as traders viewed them as safe-haven plays.

Walmart

Analyst estimates for Walmart have been mostly stable in recent months. The company is expected to report earnings of $6.76 per share in the current fiscal year and $7.27 per share in the next year, so the stock is trading at roughly 20 forward P/E.

This is not cheap, but traders are ready to pay a premium for safety. Traders will soon have a chance to evaluate whether this premium is justified as Walmart will report its earnings on May 17.

Walmart is expected to report revenue of $138.8 billion and earnings of $1.47 per share. At this point, it looks that meeting this forecast would be sufficient enough to provide some support to the stock.

Dollar Tree

While analyst estimates for Walmart have stagnated in recent months, earnings estimates for Dollar Tree have moved a bit higher. The company is expected to report earnings of $8.00 per share in the current year and earnings of $8.97 per share in the next year, so the stock is trading at 18 forward P/E.

The recent earnings reports exceeded analyst estimates and provided significant support to Dollar Tree stock, which managed to gain strong upside momentum despite the weakness in the general market.

Dollar Tree has recently pulled back from highs, and this pullback could attract traders who are willing to increase their exposure to retail stocks.

For a look at all of today’s economic events, check out our economic calendar.

Best Consumer Staples Stocks To Buy In May

Key Insights

  • S&P 500 is testing yearly lows, so traders are focused on finding safe-haven assets in the current market environment. 
  • Consumer staples stocks have enjoyed strong support this year. 
  • The stocks in this market segment are trading at reasonable valuation levels. 

S&P 500 remains under strong pressure and is testing the 4000 level, so traders continue to search for safe-haven assets that could protect them from the broad market sell-off. Consumer staples stocks have outperformed the market in 2022, and it looks that demand for such stocks would remain stable.

Walmart

Walmart has recently pulled back from its all-time highs levels, which is not surprising given the broader market performance.

Analysts expect that Walmart will report earnings of $6.77 per share in the current fiscal year and earnings of $7.27 per share in the next fiscal year, so the stock is trading at roughly 21 forward P/E.

This is not too cheap, but companies like Walmart have a good position in the inflationary environment. Not surprisingly, investors’ demand for the company’s shares remained strong in 2022, and Walmart stock is up by roughly 5% year-to-date despite general market correction.

Kellogg

Kellogg stock has recently gained strong upside momentum and moved to new highs after the company released its quarterly report.

Kellogg reported revenue of $3.67 billion and adjusted earnings of $1.10 per share, beating analyst estimates on both earnings and revenue. Traders focused on the company’s ability to deal with supply chain problems and inflationary pressures.

Analysts estimates moved higher after the release of the report. Currently, the company is expected to report earnings of $4.11 per share in the current year and $4.3 per share in the next year, so the stock is trading at 18 forward P/E. Such valuation levels look reasonable at a time when traders are ready to buy shares of consumer staples companies that can deal with inflationary pressures.

For a look at all of today’s economic events, check out our economic calendar.

Best Retail Stocks To Buy Now

Key Insights

  • Investors are searching for safe-haven assets, and retail stocks may benefit from this trend. 
  • Some retail stocks, like Walmart and Dollar Tree, have already shown strong performance at the start of this year. 
  • Other retail stocks, like Home Depot, have suffered a pullback and returned to cheaper valuation levels. 

S&P 500 gained strong downside momentum in the recent trading sessions as the market reacted to hawkish comments from the Fed. Not surprisingly, investors are searching for safe-haven assets in the rising interest rate environment, and retail stocks have a good chance to benefit from this trend.

Walmart

Shares of Walmart had a strong start of this year and are up by about 10% year-to-date. Analyst estimates have improved in recent months, and the company is expected to report earnings of $6.76 per share in the current fiscal year.

In the next fiscal year, Walmart is projected to report earnings of $7.28 per share, so the stock is trading at 22 forward P/E. This is not cheap for a retailer, but investors are willing to pay a premium as the company has reported strong performance in recent quarters.

Dollar Tree

Dollar Tree developed strong upside momentum in 2022, but the stock is still valued at less than 19 forward P/E.

Shares of Dollar Tree have clearly benefited from the rush into potential safe-haven assets amid high inflation and rising yields, and they have a good chance to continue the current upside trend.

Home Depot

Unlike Walmart and Dollar Tree, shares of Home Depot had a challenging start of this year. Currently, Home Depot is down by more than 25% year-to-date.

Analyst estimates have moved a bit lower in recent months. The company is expected to report earnings of $16.1 per share in the current year and earnings of $17.31 per share in the next year, so the stock is trading at less than 18 forward P/E.

At such levels, the stock may attract more traders who are willing to initiate positions in this market segment.

For a look at all of today’s economic events, check out our economic calendar.

Walmart Breaks Out to All-Time High

Dow component Walmart Inc. (WMT) broke out to an all-time high this week, clearing 19-month resistance at 152. SPDR S&P Retail ETF (XRT) is struggling near a 52-week low at the same time, highlighting a rotation out of smaller brick and mortar operations into the relative safety of the Arkansas-based megastore. Although questionable, new investors apparently believe that WMT can successfully navigate the gauntlet of soaring inflation and shrinking profit margins.

Soaring Labor Costs and Lower Margins

Costs are rising rapidly, just like its smaller competition, with employee wages surging to new highs. In fact, the company just announced that 12,000 drivers can earn up to $110,000 per year, adding to prior increases across the board. Fortunately, smart investments are bolstering profits at the same time, led by a 77% stake in India’s Flipkart, with valuation ahead of a 2023 initial public offering now standing in the lofty $60 to $70 billion range.

Walmart is increasing expenses by expanding into Atlanta and Toronto hubs, adding to labor costs with the hiring of 50,000 floor workers and 5,000 technology workers. These new hires come on top of 100,000 employees that were added to the global workforce in the prior fiscal year. The rapid expansion, at the same time that employee wages are skyrocketing, will require the company to rapidly translate expenses into profits to avoid disappointing market watchers.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 21 ‘Buy’, 7’ Overweight’, and 9 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $136 to a Street-high $190 while the stock is set to open Friday’s session about $9 below the median $165 target. This modest placement bodes well for continued upside into the mid-range number.

Walmart broke out in April 2020, carving a series of new highs into the September peak at 151.33. Three breakout attempts into November 2021 failed, carving a sideways pattern that crisscrossed the 200-day moving average multiple times. Aggressive buyers emerged after February 2022’s 11-month low, yielding a vertical impulse that surged above resistance this week. However, the rapid ascent has set off a major bearish divergence because accumulation has barely budged during the rally, predicting severe testing at new support.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Best Stocks to Buy in a Recession

Given all that’s happened recently, some people are talking about a recession. What’s that? It’s technically when there are two consecutive quarters (or more) of negative gross domestic product growth. Basically, it’s when the economic engine slows down.

Since 1980, we’ve had six recessions. We aren’t there yet. But if we do get there, don’t fret too much. In five of the last six recessions, the S&P 500 was up a year later.

Plus, it’s possible to succeed in almost all market conditions. I don’t mean there are ways where it’s impossible to lose. Rather, there are some stocks that seem to do quite well in recessions. These kinds of stocks are “durable” – they’re well-established names and tend to pay dividends. Let me show you what I mean.

Focusing on quality is paramount when markets are under pressure. Using my firm MAPsignals’ database, I’ve filtered for various quality metrics and a history of Big Money investment to identify five stocks that tend to do well in harder economic times: WMT, ABT, JNJ, GIS, & HSY.

Walmart Inc.

Up first is Walmart Inc. (WMT), the discount retail giant.

Even though great stocks can be choppy, like WMT over the past year, these companies are worthy of attention, especially when they have a tech-oriented growth strategy and huge hiring plans. Check out WMT:

  • 1-month performance (+8.5%)
  • Historical Big Money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals WMT has made over the years in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, WMT’s sales and earnings growth rates have held strong, and its earnings growth estimate is appealing:

  • 3-year sales growth rate (+3.7%)
  • 3-year EPS growth rate (+41.0%)
  • 2-year vs. 1-year EPS growth rate estimate (+7.6%)

What about WMT in a downturn? Over the last six recessions, its average return is an astounding (+34.4%).

Abbott Laboratories

Next up is Abbott Laboratories (ABT), the enormous health care company.

Check out these technicals for ABT:

  • 1-month performance (-3.4%)
  • Historical Big Money signals

Let’s look long-term. These are the top buy signals Abbott has made since 1990. The Big Money love is clear:

Source: www.MAPsignals.com

Now let’s dive deeper. As you can see, Abbott has had rock-solid sales and earnings growth:

  • 1-year sales growth rate (+24.5%)
  • 3-year EPS growth rate (+44.6%)

In the past six recessions, Abbott averaged a (+9.8%) gain. Even better, a year later, its average return was (+13.6%). This stock has handled downturns well in the past.

Johnson & Johnson

The third growth stock idea is Johnson & Johnson (JNJ), another enormous health care company.

Strong stocks usually have Big Money buying the shares. J&J has that. While JNJ has been choppy, it hasn’t fluctuated a lot over the past year. And it’s nice to see the stock has risen recently:

  • 1-month performance (+4.4%)
  • Historical Big Money signals

Below are the Big Money signals J&J has made since 1990. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. J&J’s sales and earnings growth is impressive. Its profitability is strong too and so is its current 2.4% dividend, which help in a recession:

  • 1-year sales growth rate (+13.5%)
  • 3-year EPS growth rate (+13.3%)
  • Profit margin (+22.3%)

In the last six recessions, J&J stock rose fives times. Its average return over those recessions is (+12.3%), so it’s a downturn winner for sure.

General Mills, Inc.

Number four on the list is General Mills, Inc. (GIS), which is a huge food and beverage company with several well-known brand names.

Here are the technicals important to me:

  • 1-month performance (-6.2%)
  • Historical Big Money signals

Below are the Big Money signals for GIS since 1990. While it’s waned a bit recently, the Big Money has liked General Mills for a long time:

Source: www.MAPsignals.com

Let’s examine a bit more. General Mills has been growing sales well, is poised to grow earnings, and owns a nice profit margin:

  • 3-year sales growth rate (+4.8%)
  • 2-year vs. 1-year EPS growth estimate (+4.3%)
  • Profit margin (+12.9%)

Regardless of the economy, people need food. That has certainly helped GIS in the past six recessions, when it gained in five of them. Its average return over that span is (+15.3%), and it grew more one year and two years later (+14.5% and +28.7%, respectively).

The Hershey Company

Our last recession stock is an easy one to understand, it’s The Hershey Company (HSY), which makes candy and snacks seemingly everybody loves.

Check out these technicals:

  • 1-month performance (+1.5%)
  • Historical Big Money signals

Hershey has made the MAPsignals Top 20 report many times since 1990:

Source: www.MAPsignals.com

Now let’s look under the hood. Hershey has been growing sales and earnings, and its profit margin is strong:

  • 1-year sales growth rate (+10.1%)
  • 3-year EPS growth rate (+8.7%)
  • Profit margin (+16.5%)

Does candy melt in a recession? No. In the last six recessions, Hershey has gained four times, with an overall average return of (+8.7%).

The Bottom Line

WMT, ABT, JNJ, GIS, & HSY represent top stocks to buy in a recession. Strong fundamentals and historical Big Money buy signals make these stocks worthy of extra attention in tough economic times.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in WMT in personal accounts.

Contact

https://mapsignals.com/contact/

 

Coinbase Announces Plan to Launch NFT Marketplace

Key Insights:

  • Coinbase eyes a piece of the NFT marketplace pie.
  • The US-listed crypto firm plans to bring innovation to the NFT sector.
  • At launch, hundreds of NFT creators will bring content to Coinbase NFT.

Coinbase is a crypto exchange based in the US and listed on the NASDAQ. Supporting crypto trading, Coinbase is one of the world’s leading crypto exchanges, with a global presence.

Coinbase Plans a Move into the NFT Sector

Overnight, Coinbase took to Twitter, announcing the imminent launch of Coinbase NFT. Coinbase NFT is a peer-to-peer marketplace allowing users to discover, mint, purchase, and showcase NFTs.

According to the announcement, Coinbase NFT met with more than a hundred creators looking to expedite the launch of the NFT marketplace.

Competing with other NFT marketplaces, including OpenSea and LooksRare (LOOKS), Coinbase NFT will aim to provide a more collaborative environment by supporting interaction between platform users and creators.

Since first announcing the planned launch of Coinbase NFT in October 2021, more than 2.5 million people have reportedly joined the Coinbase NFT waitlist.

In late 2021, Coinbase CEO Brian Armstrong talked up the NFT sector, reportedly saying that Coinbase NFT could be more successful than its cryptocurrency business. When considering the Coinbase brand, other NFT marketplaces may face tough competition ahead.

With creators currently minting on other NFT marketplaces, it is likely for them to join the Coinbase NFT community for access to more than 2.5m waitlisted users.

Regulatory Landscape Should Favor Coinbase NFT

In recent months, NFTs have garnered greater regulatory scrutiny. Record trading volumes at the start of the year coincided with a marked increase in regulatory activity.

Several jurisdictions have raised concerns over NFTs and the need for greater regulatory oversight. Despite the increase in regulatory chatter, mainstream names have flooded into the virtual world.

Big industry names entering the NFT space come from the fashion, healthcare, music, sport, and retail sectors. Some of the biggest brands include Sony, Walmart, Victoria’s Secret, Nike, the NFL, the MLB, the NBA, and UFC fighting.

The heightened interest in NFTs, rising number of trademark applications, and its continued compliance with US laws should position Coinbase NFT as a market leader. Following news of KYC requirements for the next Bored Ape Yacht Club release, Coinbase will also have the appropriate infrastructure in place to hit the ground running should US regulators impose tighter measures to protect investors.

Warner Brothers Goes NFT with DC Comic Trading Cards

Key Insights:

  • Warner Brothers announce the launch of hybrid DC Comics trading cards.
  • In partnership with Cartamundi, the trading cards will have an NFT component.
  • The hybrid cards are available this month, with new hybrids due out throughout the year.

Interest in NFTs and the Metaverse continues to rise, with numerous corporations exploring the virtual world. Big names include McDonald’s, Walmart, Red Bull, Victoria’s Secret, and many more.

Two names that have recently become active are Warner Brothers and Warner Music Group (WMG).

Warner Brothers Launches Hybrid DC Comic Trading Cards

This week, Warner Brothers announced plans to create DC Comics trading cards.

In collaboration with Cartamundi, Warner Brothers Consumer Products will launch hybrid physical and NFT trading cards. Hro, a new fan engagement platform, will deliver the NFT component of the DC trading cards.

With hybrid trading cards, fans can own a physical card, with an NFT element minted on Ethereum (ETH) based carbon neutral Immutable X.

As stated in the announcement,

“Each (Hybrid) card features unforgettable DC characters and will be equipped with a unique CR code that connects the physical card to its digital twin on the Hro app.”

The Hybrid cards will hit in-store and online platforms this month, with more cards out throughout the year.

On the Hro platform, there is a leaderboard with special rewards on offer. Hro also enables DC fans to engage with other fans across the network. The Hybrid packs will start at $4.99, with six different card sets available.

Featured products include a Chapter 1 24-pack Mega Booster Box, consisting of 168 cards, priced at $119.99.

Warner Bros and Warner Music Group Go Virtual

Last month, Warner Music Group (WMG) and Splinterlands collaborated to develop play-to-earn (P2E games). The P2E games will give players rewards that include NFTs. Players can then ‘trade, sell, or lease anything they earn in-game.’

Earlier this year, FXEmpire reported WMG going virtual by buying a beachfront property in The Sandbox (SAND). WMG plans to use the site as a musical theme park and a concert venue, which would allow WMG artists and fans to engage.

This week, news hit the wires of FTX hiring WB Games’ Boston head Steve Sadin. Sadin will reportedly become the head of the gaming partnership at FTX Gaming. FTX established a dedicated gaming unit in February.

Healthcare Giant CVS Files for NFT and the Metaverse-Related Trademarks

Key Insights:

  • CVS files NFT and Metaverse-related trademark applications.
  • Drugstores could follow in the footsteps of Walmart and deliver virtual shopping.
  • The healthcare sector could also benefit from blockchain, NFTs, and the Metaverse.

Interest in NFTs and the Metaverse has surged in recent months. A range of industries has taken to NFTs and the Metaverse. These include art, fashion, film, music, and sport.

In some countries, one sector that has been slow on the uptake is the healthcare sector. In the early days of Bitcoin (BTC), blockchain and crypto, the crypto sector identified blockchain attributes that would benefit the healthcare sector.

The COVID-19 pandemic and administrative burdens likely delayed the sector’s exploration of the digital world. This week, U.S healthcare giant CVS Health may be looking to break the mold.

CVS Health Applies for NFT and Metaverse-Related Trademarks

This week, CVS reportedly submitted a trademark application to sell “downloadable virtual goods” in the Metaverse.

According to the report, U.S. drugstore chain CVS aims to sell prescription drugs and other drugstore products in a virtual drugstore. CVS would then authenticate the products and sales with the use of NFTs.

The move by CVS comes after Walmart filed trademark applications in a move towards virtual stores in the Metaverse.

Virtual Drugstores and Healthcare Decentralization the Future Healthcare

As the U.S looks to return to some semblance of normality in the wake of the COVID-19 pandemic, the healthcare sector will likely need to take a close look at the benefits of blockchain, cryptos, NFTs, and the Metaverse.

In 2020, we explored how blockchain would change lives, the global economy, and the world. At the time, immediate healthcare sector benefits included the removal of the paper trail, making patients’ medical records available on a decentralized ledger, which would provide data points to support the fight against virus and disease.

As the healthcare sector looks at lessons learned from the COVID-19 pandemic, dissemination of information and access to critical data points could have arm healthcare workers with the necessary facts to combat viruses.

In October 2021, Forbes published an article exploring how blockchain could revolutionize healthcare. The report looks at reduced costs and new ways for patients to access healthcare. Forbes discusses one healthcare company called “Patientory.” Patientory sees blockchain networks capable of delivering a combination of transparency and privacy. Blockchain technology could give the healthcare sector access to medical data while withholding sensitive patient information. “Up-to-date patient histories and data, pandemic tracking and reporting, secure communication with verified healthcare personnel” form part of Patientory’s solutions.

For the healthcare sector, general practitioners and medical specialists could ease the strain by going Metaverse. While physical examinations need to be in person, some elements of the work could go virtual, which would reduce hospital traffic.

CVS Follows in the Footsteps of Other Mainstream U.S Corporations

In recent months, other major U.S corporations submitting NFT and Metaverse-related trademark applications include:

When considering the demise of department stores and the sharp increase in online retailing, the Metaverse could be the next best thing for online shoppers. Virtual stores could use NFTs to authenticate online sales.

One risk for the healthcare sector is the marked increase in illicit activity. Appropriate controls would need to be in place to protect personal data and personal privacy.

Uncertainty Controls Wall Street

Investors are still unsure what to make of the situation in Ukraine. The U.S. and NATO say Russia is continuing to build its military forces near Ukraine while Russia says it has sent some troops home.

Russian military exercises with Belarus are scheduled to end on February 20. The closing Ceremony for the Winter Olympics in China also happens to be the same day.

If there isn’t some noticeable decrease in Russia’s forces at that time, military experts think the West will amplify the pressures they are trying to put on Russia but who knows?

FOMC “minutes”

Turning to the Federal Reserve, the release yesterday of “minutes” from the January policy meeting confirmed what most on Wall Street already suspected – the Fed is ready to move more aggressively in the upcoming tightening cycle than what’s been done in the past. The minutes said “most” members suggested a faster pace of interest rate increases than in the tightening cycle that began in 2015. Between 2015 and 2018, the Fed lifted rates by 25 basis points a total of nine times, and never more than once in a quarter.

Most members indicated they are comfortable raising rates at consecutive policy meetings, meaning there could be multiple hikes per quarter.

Members also indicated that reductions to the Fed’s balance sheet will likely begin this year by allowing maturing bonds to roll off, though some officials did say outright selling of mortgages may be necessary.

During the 2015 tightening cycle, the Fed didn’t begin reducing its holdings until 2017. Again, Wall Street has already been expecting the Fed to act much quicker this time around so the meeting “minutes” didn’t really provide any new insights. The details as to how high and how fast rates will be raised, and when and by how the balance sheet will be reduced won’t be answered until the Fed’s next policy meeting on March 15-16.

Investor expectations for the Fed’s next moves are already extremely hawkish with the CME’s FedWatch Tool showing traders think there’s a 50% chance that the central bank hikes rates by 50 basis points next month. That’s down from earlier this month but keep in mind, it was considered a nearly 0% probability at the start of 2022.

Bulls want to believe that “Fed Fear” is mostly priced in now and that stocks prices should remain flat-to-slightly higher until the central bank reveals more details. However, there are still two key reports coming up that could significantly impact sentiment – the February Employment Report on March 4 and February Consumer Price Index on March 10. If job growth and inflation surprise to the upside, it will again stoke fears about a more aggressive Fed. The underlying fear is that the faster the Fed moves, the higher the likelihood of a policy misstep.

Data to watch

Today, investors will be digesting January Housing Starts and the Philadelphia Fed Index. Earnings of note today include Airbus, Nestle, Nice, Orange, Palantir, Roku, The Southern Company, and Walmart.

U.S. and Russian Aircraft Flew Perilously Close to Each Other Amid Ukraine Tensions The Wall Street Journal Reported… U.S. and Russian aircraft operating in the Mediterranean Sea flew dangerously close to each other in three separate incidents over the weekend, including one in which the two nations’ aircraft came within 5 feet of each other, defense officials said.

The incidents, which occurred in international airspace Friday and Saturday, involved three Russian Su-35 jet fighters crossing into the flight path of three U.S. P-8A surveillance aircraft, the officials said, and come amid heightened tensions between the U.S. and Russia over Ukraine. At the same time there are some sources reporting that Russia is bringing even more troops to the Ukraine border while others are reporting a possible retreat… so the drama continues with no one really having a clear answer.

What Moves the Stock Market This Week?

A new 40-year high read on consumer inflation last week now has Wall Street thinking the Fed might be even more aggressive with rate hikes. At the same time, investors continue to closely monitor the geopolitical headlines involving Russia and Ukraine. From what I’ve heard, there were a lot of diplomatic phone calls over the weekend, including one between Biden and Putin, but nothing seems to have changed in regard to Putin’s “poker face”.

Political tensions

Some military insiders continue to warn that Russia could now invade Ukraine at a moment’s notice. Some are saying it happens this week while others say Russia will invade after the Winter Olympics.

To add even more worry and concern, several geopolitical groups are thinking Russia and China are somewhat collaborating on strategy. This isn’t really anything new but the “buzz” and rumors are starting to get louder.

The big what if… what if Russia was to make a move on Ukraine and China a move on Taiwan in a coordinated effort? I don’t really think that happens but there’s always a possibility. Perhaps a more worrisome theory is Russia and China working together on economic warfare strategies to knock the US dollar out of its leadership role as the world’s currency.

Russia has a good hold on energy supply and China is the world’s biggest influence on the global supply chain. If Russia can withhold energy and China slows the supply chain, theoretically they could create a major wave of inflation. If at the same time, they continued to dump US Treasuries in a big way they could weaken the US dollar enough to bring into question its role as the world’s reserve currency, especially with our debt level so elevated.

The theory continues… if the US dollar was to weaken enough some exporting countries and global businesses might start to question the value of their goods being sold at a discount when the transaction is settled in US dollars.

Hence more longer-term economic concern.

Interest rate hikes

More large Wall Street insiders are talking about perhaps +5 to +7 Fed rate hikes ahead in order to slow domestic inflation. The big questions remain… how fast will the Fed shrink its balance sheet and how long before they will stop raising interest rates? St. Louis Fed President Bullard last week expressed support for a 50-basis points hike, though several other Fed officials have since argued against the idea.

Fed speculation has also brought increased volatility to bond markets with yield on the 10-Treasury topping 2% on Thursday but ending Friday a full 10-basis points lower. The 2-year yield saw its biggest one-day move since 2009, surging 26 basis points at one point on Thursday. Those are pretty dramatic swings for bond markets and highlights the extreme level of uncertainty that is plaguing financial markets.

Just keep in mind however, from the summer of 2016 to the fall of 2018, 10-year Treasury yields jumped from 1.4% to over +3.0% yet the NASDAQ was still able to increase by over +45%.

On the energy front, there continues to be talk of tighter global oil supply and higher prices ahead especially if we see military action between Russia and Ukraine. Remember, increased energy costs can quickly spread through an entire economy as manufacturers pass along higher production and transportation costs in the form of higher consumer prices. Consumers also get dinged at the gas pump as well as with higher heating and cooling costs.

With inflation already smoking hot at +7.6% and Consumer sentiment starting to waiver the market is starting to get more nervous about higher energy costs. Worsening consumer sentiment can be an early warning signal of a decline in consumer spending. However, bulls still largely expect a boost in consumer spending as the Omicron Covid wave continues to fade, pointing to the massive amount of savings and increased asset values that consumers have accumulated over the past couple of years.

Most believe that spending will shift more toward “services” and away from goods, which in turn is expected to help further ease some of the strain on supply chains and start to cool prices. Supply chains have shown slow but steady improvements, especially in the last couple of weeks as Covid cases have plunged, which most economists think will should start slowing the rate of monthly inflation gains.

By March, inflation reads will be up against much higher year-ago data which should also help to bring down the rate of monthly increases, at least in theory. And if inflation starts showing signs of coming down on its own, that would likely decrease pressures on the Federal Reserve to resort to more aggressive tactics to tame inflation.

There is no major economic data today but investors are anxious about the Producer Price Index for January due out tomorrow. The bigger economic headlines this week include inflationary data out of China and US retail sales on Wednesday morning.

The Fed FOMC minutes are also being released Wednesday afternoon. The earnings this week include Airbnb and Roblox on Tuesday; Cisco, Nvidia, and Shopify on Wednesday; Palantir and Walmart on Thursday; and Draft kings and John Deere on Friday.

Best Stocks, Crypto, and ETFs to Watch – Walmart, Gold, AMD, NVIDIA, Shiba Inu in Focus

Dow component Walmart Inc. (WMT) is testing support in the 130s for the sixth time ahead of Thursday’s pre-market release, when the company is expected to post a profit of $1.49 per-share on $150 billion in revenue. If met, earnings-per-share (EPS) will mark a modest increase compared to the same quarter last year. A breakdown will expose a decline into the March 2021 low at 126.28, in turn completing a 19-month topping pattern.  WMT buying interest has taken a major hit since August 2021, undermined by rising inflation that should lower profit margins.

GLD

SPDR Gold Trust (GLD) rallied to a three-month high on Friday, fueled by the twin tailwinds of rising inflation and growing fears of a Russian invasion. The buying spike lifted the yellow metal into 13-month symmetrical triangle resistance, setting up a potential rally that would mark the next leg of an 11-year cup and handle pattern. A breakout could trigger an historic uptrend, lifting the fund to 300 and the futures contract to 3,000.

AMD

Advanced Micro Devices Inc. (AMD) traded below 100 for the first time since October in January and bounced, gaining more than 30% into last week’s reversal at 50-day moving average resistance. The turnaround carved a wide range distribution bar on Friday, dumping the chip stock below the 200-day moving average. The stage is now set for a test at last week’s low that could yield a downdraft into strong support in the low 90s.

NVDA

NVIDIA Inc. (NVDA) earnings on Wednesday will impact AMD as well, with the chip giant expected to post a profit of $1.22 per-share on $7.43 billion in earnings.  If met, EPS will mark a 60% decline in profit compared to the same quarter last year. The stock has struggled so far in 2022, posting a 19% loss-to-date, and is testing 200-day moving average support for the first time since March 2021. Price action at and above the psychological 200 level in coming sessions will test the staying power of long-term bulls.

Shiba Inu

Shiba Inu (SHIB) has traded well in recent sessions, rallying more than 30% to a six-week high. The rally began at the .786 Fibonacci retracement level of the September into October uptrend, a high odds turning point for steep corrections. Weekly relative strength readings have flipped into buy cycles, predicting bulls will control the ticker tape through quarter’s end. A monthly sell cycle could then resume control, forcing the crypto into a test of lower price levels.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held SPDR Gold Trust in a family account at the time of publication. 

Wall Street Week Ahead Earnings: Shopify, Baidu, Walmart, Deere and DraftKings in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could hit the stock market hard over the coming months. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of February 14

Monday (February 14)

TICKER COMPANY EPS FORECAST
AAP Advance Auto Parts $1.93
ALX Alexander’s $4.29
AMKR Amkor Technology $0.65
ANET Arista Networks $0.6
SRC Spirit Realty Capital $0.81
VNO Vornado Realty Trust $0.76
WEBR Weber $-0.02

Tuesday (February 15)

TICKER COMPANY EPS FORECAST
ABNB Airbnb $0.05
AKAM Akamai Technologies $1.14
DVN Devon Energy $1.24
MAR Marriott International $1.04
RPRX Royalty Pharma $0.79
VIAC ViacomCBS $0.37
WFG West Fraser Timber $3.51

 

Wednesday (February 16)

IN THE SPOTLIGHT: SHOPIFY, BAIDU

SHOPIFY: Canadian multinational e-commerce company is expected to report its fourth-quarter earnings of $0.62 per share, which represents a year-over-year decline of over 46% from $1.15 per share seen in the same period a year ago. But the e-commerce software company would post revenue growth of over 37% to $1.34 billion.

According to Barron’s report, Gary Robinson, investment manager at Baillie Gifford said that Shopify is miles ahead of its competitors in helping merchants all over the world sell their items. He added that the company’s revenue could rise sharply in the next five years.

BAIDU: The Chinese tech giant is expected to report its fourth-quarter earnings of $1.89 per share, which represents a year-over-year decline of nearly 40% from $3.08 per share seen in the same period a year ago.

However, Baidu Inc, a leader in the Chinese search industry in terms of user market share, would post revenue growth of about 9% to $5.04 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“We maintain a “Buy” rating for Baidu (BIDU) with a target price of RMB 165. Our target price is based on the forward P/E of 18.48x and forward P/S of 0.42x for FY22. Non-GAAP EPS of RMB 56.59 ($8.98) for FY22. This provides an upside potential of 15% over the CMP of RMB 143.80,” noted Shejal Ajmera is founder and head of research at CrispIdea.

“We decrease our estimate for revenue growth to 14.3% from 19% for FY21 due to China’s low GDP growth. We estimate revenue growth of 10% for FY22 and 12% for FY23. We estimate EPS of RMB 56.19 ($8.87) and RMB 56.59 ($8.93) for FY21 and FY22, respectively.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 16

TICKER COMPANY EPS FORECAST
AMAT Applied Materials $1.85
SAM Boston Beer $2.87
H Hyatt Hotels $-0.08
MGY Magnolia Oil & Gas $0.77
MRO Marathon Oil $0.52
NVDA Nvidia $1.0
TRIP TripAdvisor $-0.04

 

Thursday (February 17)

IN THE SPOTLIGHT: WALMART

Bentonville, Arkansas-based retailer Walmart is expected to report its fourth-quarter earnings of $1.49 per share, which represents year-over-year growth of over 7% from $1.39 per share seen in the same period a year ago.

The multinational retail corporation that operates a chain of hypermarkets would post revenue growth of nearly 1% to $150.91 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“Latest AlphaWise data shows Walmart+ membership continues to increase, with ~15m members total (~12% household penetration) & ~1m net members added in the past quarter. Overlap between Walmart+ & Prime remains high; we’ll monitor if this changes with a Prime fee hike coming,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We expect Walmart (WMT) to sustain recent momentum in its core business in F’22/F’23 and see a growing ability to balance longer-term investments with near-term returns. Our OW rating and $170 PT are underpinned by a preference for 1) quality players with scale and 2) defensive retailers as the market undergoes a mid-cycle transition.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 17

TICKER COMPANY EPS FORECAST
AN AutoNation $4.96
DBX Dropbox $0.2
ROKU Roku $0.01

 

Friday (February 18)

IN THE SPOTLIGHT: DEERE, DRAFTKINGS

DEERE: The world’s largest maker of farm equipment, is expected to report its fiscal first-quarter earnings of $2.28 per share, which represents a year-over-year decline of over 41% from $3.87 per share seen in the same period a year ago. The agricultural, construction and forestry equipment manufacturer would post revenue growth of about 0.5% to $8.09 billion.

“Higher input and freight costs to affect FY22 margins. We downgrade our rating to “Hold” from “Buy” for Deere & Co. and upgrade our TP to $406 for FY23. We derive TP based on non-GAAP EPS to $22.30 & $25.14 for FY22 & FY23, respectively and P/E of ~16.1x for FY23. This provides an upside potential of 8.6% from CMP of $373.79,” noted Shejal Ajmera, Head of Research at Crispidea.

“Following are the reasons for the above assumptions: 1) Strong demand in farm and construction equipment to aid topline; 2) Focus on automation to ensure long term growth and 3) Short term headwinds to affect profitability.”

DRAFTKINGS: The U.S.-focused gambling operator is expected to report its fourth-quarter loss of $0.78 per share, a dime greater than the loss of $0.68 it recorded in the same period a year ago. But the revenue would grow more than 36% to $439.5 million.

“We forecast legal US sports betting & iGaming to increase from <$1.5B in 2019 to $20.6B in 2025 as more states legalize and spend per capita rises. Forecast DKNG to maintain top tier share, 24% in OSB and 21% in iGaming in 2025. Investors question LT profits, but other developed markets have shown 25-30%+ profits for operators at maturity, esp. those with a customer acq. advantage similar to DKNG’s with its DFS database,” noted Thomas Allen, equity analyst at Morgan Stanley.

“Current valuation of 9x 2025e EBITDA does not reflect long-term margins or growth. Upside drivers include signs of profits in mature states, new product innovation and higher market share. Downside risks include higher losses, greater competition and lagging product innovation.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 18

TICKER COMPANY EPS FORECAST
ABR Arbor Realty Trust $0.39
B Barnes Group $0.49
BLMN Bloomin’ Brands $0.52
DE Deere & Co. $2.28

 

Preview: What to Expect From Walmart’s Earnings Next Week

Bentonville, Arkansas-based retailer Walmart is expected to report its fourth-quarter earnings of $1.49 per share, which represents year-over-year growth of over 7% from $1.39 per share seen in the same period a year ago.

The multinational retail corporation that operates a chain of hypermarkets would post revenue growth of nearly 1% to $150.91 billion. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Walmart stock traded 0.48% higher at $136.73 on Friday. The stock fell more than 5% so far this year after remaining flat in 2021.

Analyst Comments

“Latest AlphaWise data shows Walmart+ membership continues to increase, with ~15m members total (~12% household penetration) & ~1m net members added in the past quarter. Overlap between Walmart+ & Prime remains high; we’ll monitor if this changes with a Prime fee hike coming,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We expect Walmart (WMT) to sustain recent momentum in its core business in F’22/F’23 and see a growing ability to balance longer-term investments with near-term returns. Our OW rating and $170 PT are underpinned by a preference for 1) quality players with scale and 2) defensive retailers as the market undergoes a mid-cycle transition.”

Walmart Stock Price Forecast

Twenty analysts who offered stock ratings for Walmart in the last three months forecast the average price in 12 months of $166.00 with a high forecast of $196.00 and a low forecast of $136.00.

The average price target represents a 21.22% change from the last price of $136.94. Of those 20 analysts, 13 rated “Buy”, seven rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $220 under a bull scenario and $110 under the worst-case scenario. The investment bank gave an “Overweight” rating on the multinational retail corporation’s stock.

Several analysts have also updated their stock outlook. Goldman Sachs cut the target price to $175 from $201. Citigroup lowered the price target to $176 from $179. Truist Securities initiated with a hold rating and set the target price at $153.

Technical analysis suggests it is good to sell as 150-day Moving Average and 100-200-day MACD Oscillator showing a strong selling opportunity.

Check out FX Empire’s earnings calendar

Blockchain.com Adds a Former Walmart Director to its Board

The cryptocurrency and blockchain industry has seen an influx of experts from traditional financial institutions over the past few years, and the trend could continue.

Horton Joins the Blockchain.com Team

Cryptocurrency startup Blockchain.com has announced the addition of Tom Horton to its board. Horton is an independent director from Walmart and has become the latest executive from a traditional company to join a crypto startup.

The Walmart director now joins a host of other executives on Blockchain.com’s board. The company recently added Marcie Vu, former head of consumer Internet banking at Morgan Stanley, to its board.

Other financial backers of the company include Google Ventures, Sir Richard Branson, and Lightspeed Commerce Inc.

Blockchain.com is one of the leading cryptocurrency companies planning to conduct an initial public offering (IPO) in the near to medium term. However, there is no set date regarding the company’s planned public listing.

Horton’s addition to the Blockchain.com board highlights a growing trend in the cryptocurrency and blockchain industry. The past few years have seen numerous mainstream financial institutions and businesses enter the blockchain space.

Visa, one of the leading payment facilitators in the world, launched a cryptocurrency advisory forum towards the end of last year. BlackRock is another traditional financial institution that is currently involved in the crypto space.

MasterCard, PayPal, MoneyGram, Morgan Stanley, Goldman Sachs, and several other traditional financial institutions are currently involved in various crypto-related activities.

The Crypto Market is Slowly Recovering

The cryptocurrency market suffered huge losses over the weekend, but it is now slowly recovering. The total cryptocurrency market cap has climbed above $1.6 trillion again after dropping towards $1.5 trillion yesterday.

Bitcoin declined towards the $33k level but has added more than 8% to its value in the last 24 hours and is now trading at $36,402 per coin. Ether is currently targeting the $2,500 psychological level after rallying by more than 7% in the past 24 hours.

UAE’s Al Habtoor Group Jumps Into the NFT Craze

The NFT ecosystem seems unstoppable, Al Habtoor Group joins GAP and Walmart as the latest known multinational companies to enter the NFT world.

The NFT collection called “Last Hopium” was founded by Habtoor Al Habtoor and contains 10,000 unique items. The release of the NFT collection will be during Q1 2022.

“We have created a unique model and a first-ever seen for the hospitality sector, where the NFT holders can generate their own experience and either indulge in it or make profit out of it,” said Habtoor Mohammed Al Habtoor

For this to happen, Al Habtoor Group partnered with Luna PR, a Dubai-based digital marketing agency that works with the crypto ecosystem across the globe.

“Last Hopium” NFT Collection

The designer behind this NFT collection is an artist named Noxx. Last Hopium includes 10,000 completely different avatars divided into two different groups, a “Mekamorph” or an “Exomorph”.

The official webpage claims that “Last Hopium is an NFT drop by the gods, for the gods”. Also, the team says that if you want to become a “METAGOD” and live like one, you have to own a Last Hopium NFT.

“Last Hopium holders will have the most exclusive access to the most sought-after opportunities. Real luxury, real wealth, real status, and real experiences. We shall leave the best for last!” says Last Hopium official’s website.

About Al Habtoor Group

Al Habtoor Group was founded by Khalaf Ahmad Al Habtoor in 1970 as a small engineering firm in the United Arab Emirates. Nowadays, the Group has expanded its activities to the hospitality, automotive, car leasing, real estate, education, and publishing sectors.

Hospitality is one of the most important sectors in which Al Habtoor Group works, having 14 high stars hotels around the world, seven in UAE and the other seven across the globe, including The Ritz-Carlton in Budapest and the Imperial Hotel in Vienna.

Holders of Last Hopium NFT’s collection, will be able to enjoy real-time experiences and opportunities in the whole world.

It is incredible that in the first 20 days of the year, well-known companies have announced their interest in NFTs. Let’s hope more companies will jump into this craze as Al Habtoor Group did.

Metaverse, NFTs and Cryptos Are the Next Big Thing for Retail Giant – Walmart

Walmart Inc, the largest retailer in the US, has quietly filed a slew of new trademark applications with the United States Patent and Trademark Office (USPTO) for selling virtual goods including electronics.

Apart from its own metaverse, another separate application showed that the company is gearing up to establish its own cryptocurrency and non-fungible tokens (NFTs).

Seven trademark applications were submitted in December 2021, a CNBC report said. In an effort to “continuously explore emerging techs,” Walmart has been testing new ideas on virtual shopping.

“Some ideas become products or services that make it to customers. And some we test, iterate, and learn from,” the company told the publication.

The company also filed three applications under its digital advertising project, dubbed “Walmart Connect”. “Verse to Store,” “Verse to Curb” and “Verse to Home” were filed for the shopping category, according to Bloomberg.

Walmart has been dipping hands into the crypto space ever since its Chief Financial Officer Brett Biggs said in December that the company is planning to allow shoppers to pay in cryptocurrencies like Bitcoin and Ethereum, provided if customers’ demand rises.

In September’21, a hoax news release claimed that Walmart would begin accepting payments in Litecoin, which triggered the cryptocurrency by 30 percent before the retail giant said that the announcement was fake.

More Retailers Join the ‘Meta’ Club

Walmart is very on-trend albeit arriving fashionably late to the metaverse conversation. The company has become the latest to join the retail metaverse run with Nike, Adidas, Ralph Lauren, Facebook, and Disney.

Global sportswear giant Nike recently announced, “NikeLand”, its own metaverse on the Roblox gaming platform. Players can utilize accelerometers in their mobile devices to convert offline movement to online play. In December, Nike bought a virtual sneaker company – RTFKT, for an undisclosed sum.

Similar metaverse trademarks were filed in recent weeks by other apparel retailers such as Ralph Lauren, in an effort to open their own version of the virtual shop.

When it comes to the NFT marathon, retailers such as Gap, Adidas, and Under Armour have already debuted their NFT sales on the OpenSea marketplace.

Other companies are also looking at the success of Nike’s and Adidas’s NFTs and are rushing to the nearest blockchain.

Is the Future of Retail Virtual?

The way consumers shop at stores is evolving and that is definitely toward a connected showroom environment that includes digital and physical retailing.

Metaverse is an omnichannel atmosphere, where buyers use augmented and virtual reality to digitally engage with their surroundings. This idea also poses the concept of a direct-to-avatar business model, where people can interact digitally using avatars.

For instance, customers can even point their smartphone’s camera toward their feet and see on their screen how the new pair of sneakers might look like, before heading to checkout.

One Twitter user posted a video demonstrating how the future of Walmart metaverse would possibly work.

All of this means that the retailers would need to create a positive metaverse – presence and convert the existing online experience, in this new virtual world. The metaverse is much of a “to be continued” model as of now so that retailers shouldn’t be struggling to come up with avatar-fitting jackets or virtual shops.

Costco Fully Valued Ahead of Earnings

Costco Wholesale Corp. (COST) reports fiscal Q1 2022 earnings after Thursday’s closing bell, with analysts looking for a profit of $2.65 per-share on $49.75 billion in revenue. If met, earnings-per-share (EPS) will mark a 16% profit increase compared to the same quarter last year. The stock rose 3.3% in September after the company exceeded Q4 EPS guidance with a 17.5% revenue increase, but fell 7% in the next six sessions.

Black Friday Bummer

The big box retailer reported November comparative sales of 9.2%, with net sales rising 15.7% year-over-year. E-commerce growth slowed to 11.7%, held back by tough comparisons after 2020’s pandemic sales surge. Despite those results, investor sentiment is mixed after U.S. Black Friday store sales dropped $100 million compared to last year’s record of $9 billion. In addition, it was the first time the annual event generated no online spending growth.

The stock has defied gravity throughout 2021 and is now boasting an impressive 41% year-to-date return. However, rivals Walmart Inc. (WMT) and Target Corp. (TGT) have struggled in the last four months, suffering through active distribution that increases risk heading into Thursday’s report. In addition, the weekly Stochastic indicator has now flipped into a sell cycle, predicting rangebound action or lower prices into the first quarter of 2022.

Wall Street and Technical Outlook

Wall Street consensus stands at a ‘Moderate Buy’ rating based upon 17 ‘Buy’, 6 ‘Hold’, and no ‘Sell’ recommendations. Price targets currently range from a low of $423 to a Street-high $600 while the stock is set to open Thursday’s session right on top of the median $532 target. This mid-range placement indicates that Costco is fully valued at this time and will need to post blow-out quarterly results to book higher prices.

Costco cleared February 2020 resistance around 325 in August and stalled near the 400 level in November. A secondary breakout in June 2021 attracted intense buying interest, lifting the stock nearly 180 points into November’s all-time high at 560.78. A distribution wave into December has reversed bullish signals, with price action likely to carve an extended trading range, with resistance at the high and support at the 50-day moving average near 500.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Situation on Major US Stocks

Apple climbs higher after another symmetric triangle pattern.

Amazon breaks the horizontal resistance and aims north.

Berkshire Hathaway goes down after the false breakout above the crucial horizontal resistance.

eBay is on the lower line of the channel up formation.

Goldman Sachs is more or less in the same situation but bounces with a promising hammer.

3M breaks the lower line of the wedge and aims south.

Netflix, with an evening star pattern and a false breakout above an important horizontal resistance.

Walmart, Covestro, Airbus and Westfield inside of symmetric triangle patterns. Here, a breakout should happen soon and will show us a direction to follow in the next few weeks or months.

WMT Down by More Than 2% Despite Walmart’s Earnings Surpassing Expectations

The shares of Walmart are down by more than 2% since the US market opened despite the company’s quarterly earnings surpassing analysts’ expectations.

Walmart’s Q3 Earnings Impresses

Walmart, the leading retailer in the United States, reported its third-quarter fiscal earnings earlier today. The company’s Q3 earnings surpassed analysts’ estimates despite inflation affecting the prices of goods across the United States.

The retail giant generated $140.53 billion in the previous quarter, surpassing the $135.60 billion expected by market analysts. The adjusted earnings per share was $1.45, more than the $1.40 predicted by Wall Street experts.

Thanks to the company’s excellent earnings, Walmart had raised its forecast for 2021. It expects the adjusted earnings per share to be around $6.40 versus its prior expectations of between $6.20 and $6.35.

Walmart CEO Doug McMillon said the retail giant is optimistic about the upcoming holidays and is already prepared for the season. He stated that “There’s a level of excitement in the air. You can feel it. I’ve been walking away from these stores with a recurring thought, ‘We’re ready, we have the people, the products, and the prices to deliver a great holiday season.’”

WMT Dips Despite Positive Earnings Report

The shares of Walmart are down by more than 2% since the market opened despite the company reporting better-than-expected earnings figures. At press time, WMT is trading at $142.48 per share, down by 3% over the past few hours.

WMT stock chart: FXEMPIRE

WMT has underperformed in recent months as it struggles to recover from the Coronavirus pandemic. Over the past 52 weeks, WMT has lost 5% of its value, while its price is only up by 0.09% since the start of 2021.

In contrast, Amazon, its major competitor in the United States, has added more than 9% to its value since the start of the year. WMT could still rally over the coming weeks as the holiday period approaches, and the sales are massive during that period.