Two big wins on earnings set the stage for more retail sales data today.
Both Walmart (WMT) and Home Depot (HD) posted better than expected earnings, which shows that inflation is not simply grinding retailers into the dirt.
For some, it’s providing an opportunity.
WMT got a boost from customers looking for low priced groceries, as well as from Back To School shopping and overseas earnings from India.
Home Depot’s earnings are arguably even more important. It shows that customers are not putting their plans on hold, despite high prices for supplies and raw materials.
Expectations for the larger economy today are for a 1% gain in retail spending. And yes, whatever is reported today will be taken as an indicator for the holiday season.
Much to my surprise and annoyance, that is already underway…
(It’s mid-November and already if I hear “All I Want For Christmas Is You” one more time I’m going to burn down the shopping mall.)
The experts say that Americans have “excess savings” that they are ready to use on holiday shopping… but many Americans are just putting everything on their credit cards.
Almost 60% of Americans who earn less than $50,000 have a credit card balance that they need to carry from month to month.
The average credit card rate in this country is now more than 22%.
Look, trading is a necessity in a market like this.
There’s money for Ukraine, there’s money for the IRS, there’s no money for you.
We’re the only people on our side.
So we have to go out and take what’s ours.
That’s why it’s important to be part of a team – and realize that you aren’t in this alone.
You’ve got all of Rogue at your back. Just say the word.
WORD ON THE STREET
’45 Running, WMT Beats Expectations, Home Depot Beats Inflation
- Make Money, Earn Better – Walmart (WMT) got retail week off to a strong start, announcing that sales were up almost 9% in the third quarter. WMT beat expectations on both earnings per share and on revenue. WMT gained more than 6.5% during the trading day.
Least Surprising Candidacy Underway – Former president Donald J. Trump is running again. As he attempts to overawe his rivals in the Republican Party, ’45 announced his candidacy from Mar-a-Lago. President Trump said he’s making another attempt because he wants to make the country “great and glorious again.”
Inflation Can’t Stop HD – Home Depot (HD) admitted it is navigating a “unique environment” when it comes to inflation. However, the troubled economy wasn’t able to stop the company. Home Depot beat expectations on both earnings per share and revenue, with the company posting a profit of $4.3 billion.
Household Debt Up BIG – Total household debt jumped by $351 billion from July to September, the largest nominal quarterly increase since 2007. With inflation still running hot and interest rates up, Americans are turning to plastic to make ends meet. “Credit card, mortgage, and auto loan balances continued to increase in the third quarter of 2022 reflecting a combination of robust consumer demand and higher prices,” said Donghoon Lee of the New York Federal Reserve.
HOT SPOTS: What’s Going on in Geopolitics
- Joe Biden Says Missile In Poland “Unlikely” To Come From Russia – Midday yesterday was arguably the closest NATO came to direct intervention in the war. Wreckage from a missile strike reportedly crashed in Poland, killing two people. This led to an investigation and talk of Poland invoking Article 5, which would pledge all NATO members to defend Poland against Russia. However, President Joe Biden said yesterday that a preliminary investigation shows that it is unlikely the missile came from Russia. It may have been shrapnel or debris from Ukrainian missile defense. Russia has denied launching any strikes at or near Poland.
Russia Steps Up Attacks On Infrastructure – Russia targeted Ukraine’s power supply with about 100 missile strikes throughout the country. Power outages were reported from Kyiv to Lviv. Moldova was another casualty of the attacks, with the country reporting “massive power outages.”
Violent Protests In Guangzhou – It might be more than the economy. There might be another reason China is trying to back down from its zero-COVID policy – its people simply won’t put up with it anymore. Social media shows hundreds of workers near the key manufacturing city of Guangzhou tearing down barriers meant to confine them in their homes and taking to the streets. China refused all official comment on the reported unrest.
CUTTING EDGE: What‘s Happening In Tech
- Bezos Warns Of Bad Economy – Amazon founder Jeff Bezos doesn’t sound any more hopeful about the economy, warning Americans to cut back during hard times and for investors to move towards safer harbors. “Take some risk off the table,” he said. “Just a little bit of risk reduction could make the difference.”
Low Tech Drought Could Threaten High Tech Data – Companies including Meta Platforms, Microsoft, and others consume vast amounts of water in order to cool their data centers. However, more than half the country is now at risk of a drought. Companies are making reforms to become “water positive,” but remain at risk for higher than expected expenses in the short-term.
SpaceX Scores Upgraded Contract From NASA – SpaceX’s Starship landing system is getting more official support. NASA awarded a “contract modification” worth about $1.15 billion for SpaceX to further develop the program.
FOR YOUR CONSIDERATION
“That said, winning control over crypto might be more useful for the elite’s purposes than crushing it.”
“My longtime contention is that the United States will use bitcoin and cryptocurrency generally as a ‘support’ for the dollar. It will essentially use technology that was meant to threaten the world reserve currency as a way of giving it a further lease on life instead.”
You’ve heard the latest conspiracy theory? The one about a Central Bank Digital Currency that will allow the Powers That Be to track everything you do?
Well, it’s true.
Or at least it’s a lot more plausible. Mr. X updates you on the Fed’s latest “experiment” and what it might mean for crypto. It’s probably good for the bottom line, but bad for dreamers who thought crypto would liberate people from central banks.
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