Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Monday, Feb. 20, 2024. The Bottom Line segment of today’s podcast starts at (2:55) for listeners who want to skip ahead.
0740: Updates with Walmart (WMT 0.00%↑) earnings, second paragraph.
State of Play
As we look at our board of indicators at 0635, risk appears looks weighted to the downside:
Stock index futures are pointing to a lower open, with small caps leading the drop. The Russell 20000 is down 0.9%, followed by the Nasdaq (-0.6%) and S&P 500 (-0.4%);
Commodities are retreating a bit too, with WTI crude oil down 1% to trade around $77.70/barrel and copper down 0.3%;
Bonds are seeing a few bids however, with the 2-year yield down 4 basis points to 4.62% whilst the 10-year is down 1bps to 4.28% (yields move inversely to prices).
Today’s Known Events
A pair of massive consumer companies report earnings. Home Depot (HD 0.00%↑ ) just reported sales that fell short of analyst estimates and the stock is moving lower in the pre-market. The same trend that HD observed last year, of consumers buying fewer big-ticket items, remained in place.
Walmart (WMT 0.00%↑) did much better, beating top- and bottom-line estimates and reporting a surge of e-commerce sales around the holiday shopping season. Walmart also announced it would acquire TV maker Vizio.
There’s virtually nothing to speak of when it comes to economic data releases. The Conference Board’s Leading Index is out at 1000. Economists expect a drop of 0.1% month-over-month, which would be an improvement over the 0.2% decline recorded last month.
The Bottom Line©️
So more of the same from Home Despot then. Earnings will continue to be the story of the week. Nvidia (NVDA 0.00%↑) is the main event here, and they report tomorrow after the close.
This will be closely watched. Nvidia has quite a hurdle to jump with earnings expectations. What happens here is likely to set the tone for the week — and probably beyond.
There is a little bit of a sense of foreboding that appears to have infiltrated the market now, but maybe that’s just The Contrarian being paranoid.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
Please take the new readership/listenership survey right here in Substack! You will be entered into the drawing for a free Contrarian™️ coffee mug.
This Substack chat tracks The Contrarian’s trades in (almost) real time. The full portfolio is available upon request.
If this daily thing is drowning your inbox and/or you CBF to bother with it and prefer to just get the guest feature or actionable highlights — you can control these settings on your account page.
Walmart, Home Depot Earnings