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Morning Commentary

Juggernaut

By Charles Payne, CEO & Principal Analyst
2/19/2019 9:20 AM
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The market is firing on all cylinders, as exhibited Friday when each sector finished higher. I continue to marvel and applaud leadership this year, and just how widespread this rally has been. 

This is an ideal rally with all sectors in the mix (Industrial and Energy) setting the pace.

Sector Performance

Feb 15

YTD

S&P 500 Index

+1.09%

+10.72%

Communication Services (XLC)

+0.44%

+11.87%

Consumer Discretionary (XLY)

+0.69%

+11.16%

Consumer Staples (XLP)

+0.95%

+7.03%

Energy (XLE)

+1.61%

+15.29%

Financials (XLF)

+2.13%

+10.96%

Health Care (XLV)

+1.51%

+7.33%

Industrials (XLI)

+1.34%

+17.51%

Materials (XLB)

+1.36%

+7.84%

Real Estate (XLRE)

+0.60%

+12.90%

Technology (XLK)

+0.80%

+12.33%

Market breadth continues to augur for this market to move higher, as it certainly underscores the greater passion among market bulls.

NYSE

NASDAQ

The last 20 minutes of trading on Friday saw a remarkable surge in volume that added another 50 points to the Dow Jones Industrial Average, which finished the session at the high of the day, up 443 points.  That kind of rally is unusual for any Friday session, but ahead of a three-day weekend it is almost unheard of.

There is no doubt that panic buying kicked in, and now we have to wonder about all that money sloshing around on the sidelines. All those fund managers are tormented by having missed the rally, and possibly missing even more.

Dow Jones Industrial Average

American Consumers In-Depth

As earnings season winds down, there are still important names left to report, including Walmart (WMT), which has struggled after posting financial results over the past year. The stock has been hammered in three of the last four earnings releases, and the lone time shares rallied. They were lower in one week than the initial first-day reaction.

It’s not that the company has missed Wall Street consensus, but the problem has been guidance and reaction to the Internet growing pangs. 

WMT

Earnings Reactions

Result

One-Day

One-Week

Feb 20, 2018

Miss $0.04

-10.2%

-11.1%

May 17, 2018

Beat $0.01

-1.9%

-3.6%

Aug 16, 2018

Beat $0.07

+8.1%

+4.8%

Nov 15, 2018

Beat $0.07

-1.9%

-7.2%

In the third quarter, the company posted revenues of $124.9 billion, +1.4% as same-store sales at Walmart stores climbed 3.4%, and Sam’s Club, 3.2%; E-commerce improved just 32%.

In the aftermath of a horrendous Consumer Confidence Report, all eyes will be on Walmart. It’s not just to see how the brick-and-mortar giant is faring against Amazon, but it’s also a proxy for the health of the American consumer.

Note: Amazon (AMZN) shares have somewhat recovered.  The volume in WMT is slowing as it approaches earnings day. The stock is still well below the high of $108 back in January 2018.

Today’s Session

Walmart beat the street with impressive results allowing the company to hike its dividend for the 46th consecutive year. The results are huge but management only reiterated full year guidance, which could cause some investors to pause and others to sell.  No matter what the stock does, this report, especially pricing power at Walmart US stores, points to a robust consumer. 

Ecommerce sales +43%

Revenue $138.79 billion consensus $138.65

Earnings $1.41 consensus $1.33

Comp Store

US Walmart 

4Q19

4Q18

Sales (billions)

$90.5

$86.6

Traffic

+0.9%

+1.6%

Ticket 

+3.3%

+1.0%

Comp 

+4.2%

+2.6

 

Comp Store

Sam’s

4Q19

4Q18

Sales (billions)

$14.9

$15.5

Traffic

+6.4%

+4.3%

Ticket 

-3.1%

-1.9%

Comp 

+3.3%

+2.4%

 

International

4Q19

4Q18

Sales (billions)

$32.3

$33.1


Comments
Charles, thank you for being the FACTS based news media &FBN. You put the facts to the liars,whiners. & just plain idiots. Next leg up BULL MARKET CONTINUES. Thank you Charles PAYNE & FBN. Thank you president Trump. USA CITIZENS will NEVER ALLOW SOCIALISM IN USA. We must reeducation & have non biased evaluations of the Obama indoctrination he pushed into COLLEGES, shutting down differences in opinion thoughts, and how to DEBATE on FACTS, not fear& emotions propaganda. Honor our country, VETERANS , military, and patriotic USA CITIZENS.

J on 2/19/2019 10:45:08 AM
What a great report - you continue to amaze. Please keep up the insightful analysis.

El Zorro Oro on 2/19/2019 10:49:33 AM
 

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