Payne's Perspective: August 19, 2019: Wild Week
What a wild week for the market, which reacted harshly to what might happen in the future. It was rescued several times by what just happened and probably is still happening. Hidden in the wild gyrations of the market, and obscured by negative speculation once again, was the release of more quarterly financial results. The primary tool for measuring the success of publicly traded companies are these earnings reports, which will ultimately play the most significant role in determining value.
Two weeks ago, overall earnings turned lower and the feeling was early warnings of an “earnings recession” were coming true. Once again, recent earnings results have been much better than anticipated.
The highlight of last week was Walmart (WMT), which serves as a proxy for the economy and the strong American consumer. One-third of Walmart shoppers come from households’ earnings more than $100,000 annually. This is an example of a great American company adjusting to competition and other macro challenges. The stock was in trouble not too long ago, seen by many as too large and rigid to compete in the Amazon (AMZN) world.
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