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Target And Walmart: Same Business But Different Trends
Yesterday’s Commentary shared Walmart’s outstanding earnings report and reviewed its surging share price from a technical basis. Despite being a head-to-head competitor of Walmart, Target is heading down a completely different path. Walmart beat EPS and revenue expectations easily, while Target was short. Target reported EPS of $1.85, well below estimates of $2.30. Unlike Walmart, […]
Nov 21, 2024
Walmart Shares: Great Fundamentals But At A Frothy Price
Walmart’s (WMT) shares opened higher as its earnings report surpassed expectations. EPS and revenues beat expectations. Moreover, the company increased its sales guidance for next year by a full percent. As its latest earnings report reminded us, Walmart is doing very well financially. Furthermore, its share price has surged, reflecting the company’s health. While the […]
Nov 20, 2024
Gold Miners Enter The Bears Den
Many investors consider a decline of 20% or more to be a bear market. We can debate the merit of the random 20% figure, but according to that definition, gold miners, down 25% from its peak on October 22, are in a bear market. We have noted numerous times in the last month or so […]
Nov 19, 2024
5X5 Inflation Expectations: A New Benchmark To Follow
At the last FOMC meeting, Jerome Powell was asked if they were concerned that inflation expectations are “de-anchoring, or put another way, are anchoring at a slightly higher level?” His answer specifically referenced the 5×5 forward inflation expected rate. He could have used many data points to answer the question. However, the fact that he […]
Nov 18, 2024
2% CPI Is Here
2% CPI is a headline you won’t find in today’s Wall Street Journal. The reason is that official inflation gauges, such as CPI, are in the mid to upper 2% range. Last Wednesday, for instance, the year-over-year CPI rate clocked in at 2.6%. We claim inflation is at 2% because we know that 40% of […]
Nov 15, 2024
Seeking Beta
While the “Trump rally” appears to have just begun, one of its initial hallmarks is that investors want beta. Beta is a measure of the volatility of a stock versus the broader market, most often the S&P 500. For instance, a stock with a beta of 1.50 implies that based on prior trading, investors should […]
Nov 13, 2024
Crypto Soars
On the campaign trail, Donald Trump favored the crypto industry, including appointing “crypto-friendly” regulators. Moreover, one of the plans he mentioned several times was the creation of a federal strategic reserve of crypto assets. Trump’s decisive victory, along with the Republican sweep of Congress, makes it even more likely the crypto industry and related cryptocurrencies […]
Nov 12, 2024
Super Micro Is Not So Super Anymore
Super Micro Computer Inc. (SMCI) was the market’s darling only six months ago. Amazingly, Its stock, had risen 3x in just the first three months of 2024. Consequently, S&P Global announced its addition to the S&P 500 Index. The announcement is annotated below with a box in early March. Furthermore, the circle, which coincides with […]
Nov 11, 2024
As Expected The Fed Cut Rates
As expected yesterday, the Fed cut the Fed Funds rate. With the expected 25bps rate cut, the new range for Fed Funds is 4.50-4.75%. The redlined second paragraph below, regarding inflation, is the only meaningful change to the FOMC statement. We think the Fed made the change to present a more hawkish stance. Furthermore, it […]
Nov 8, 2024
A Second Trump Term Stokes The Inflation Narrative
After Tuesday night’s initial election results started to point to increasing odds of a Trump victory, bond yields began to rise sharply, as shown below. The surge in rates was not a sudden move. Over the past month, betting odds favoring a second Trump term and bond yields rose in unison. The narrative emerging from […]
Nov 7, 2024
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