Walmart shows positive outlook compared to Home Depot
Tech volatility sparked by Nvidia’s earnings. Walmart rises, Home Depot falls. Amazon, Uber join Dow Jones. Global markets, commodities watched.
Tech Volatility
The tech sector experienced volatility as Nvidia, a leading chipmaker, prepared to release its quarterly update. Nvidia’s soaring stock price, up by 225% over a year, positioned it as a top-five market cap company, sparking concerns about meeting lofty expectations. The S&P 500 and Nasdaq faced declines, with Nvidia plummeting by 4.35%. Analysts anticipated earnings of $4.56 per share and a revenue increase to $20.378 billion. The tech turbulence extended to Palo Alto Networks, which dropped over 20% due to cautious spending projections.
Mixed Fortunes in Retail
Amidst tech sector concerns, retail showed mixed performances. Home Depot’s subdued update contrasted Walmart’s positive outlook, driving its stock to record highs. Walmart’s forecasted sales for fiscal 2025 exceeded expectations, boosting its price by over 3%. Additionally, Walmart’s acquisition of Vizio for $2.3 billion elevated Vizio’s shares by 16.26%.
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Amazon & Tech company Uber Join Dow Jones 30
Amazon.com Inc. is poised to enter the Dow Jones Industrial Average, replacing Walgreens Boots Alliance, as S&P Dow Jones Indices respond to Walmart’s 3-to-1 stock split, reducing its index weight. This move, coinciding with Walmart’s split, aims to enhance consumer retail exposure within the DJIA. Amazon’s inclusion will alter stock weightings significantly, ranking 17th out of 30, while Walmart’s weighting falls to 26. Concurrently, Uber Technologies joins the Dow Jones Transportation Average, supplanting JetBlue Airways, enriching index exposure to the ride-sharing sector. Following these announcements, Amazon shares rose by 1.4%, and Uber’s stock gained 1.1% in after-hours trading.
Federal Reserve and Market Sentiment
The Federal Reserve’s release of minutes from its Jan 30-31 meeting garnered attention, particularly regarding future rate adjustments and balance sheet management. While the rates market appeared calm, crude oil price retreats and soft January inflation reports in Canada influenced market sentiment. The possibility of a Fed rate cut in June overshadowed expectations for an imminent adjustment, supported by over 80% of S&P 500 companies reporting modest earnings growth.
Global Landscape & Tech
In Asia, Nvidia’s impending update impacted stock markets in Hong Kong, China, and Taiwan, which collectively contribute over 45% of Nvidia’s revenue. Despite Japan’s strong export performance, its Nikkei 225 index faced a minor dip. Australia’s wage index marked a significant annual increase of 4.2%, the highest since 2009, driven primarily by private sector growth.
In Europe, Germany’s DAX and Paris’ CAC 40 saw gains, while London’s FTSE 100 experienced a slight decline. Additionally, HSBC’s record profit was offset by a $3 billion impairment charge related to its investment in a Chinese bank, leading to a drop in its Hong Kong-listed shares.
Commodities and Currency
Oil prices experienced a modest decline, with U.S. benchmark crude at $76.86 a barrel and Brent crude at $82.16 per barrel. The U.S. dollar remained relatively stable against the Japanese yen and the euro.
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