Here's What We'll Be Watching From Several Key Earnings Reports
We'll also be looking into the April housing starts.
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* Earnings from Walmart, Applied Materials, and others on tap today – here’s what we’re watching for the Portfolio and the Bullpen.
* We’ll be digging into April Housing Starts with an eye toward these two Bullpen names.
* This is what we suspect today’s wave of Fed speakers will say.
This morning brings quarterly results from Walmart WMT, Canada Goose GOOS, and Under Armour UAA, with Applied Materials AMAT and Take-Two TTWO on deck after today’s market close.
When we dig into Walmart’s results, we’ll be interested in management’s comments about consumer spending patterns, basket size, and average ticket, and given the recent addition to TreeHouse Foods THS to the Bullpen, what it says about shoppers leaning into private label brands. Quarterly sales figures from Canada Goose and Under Armour will add another dimension to consumer spending patterns.
With funds starting to flow from the U.S. CHIPs Act and similar efforts underway in the eurozone, Japan, and now Korea, the outlook provided by Applied Materials should be bright. We also suspect ramping AI, data center, and soon AI-on-device chip demand will lead the semi-cap company to paint a favorable capital spending picture. Based on what we learn, we’ll adjust our AMAT price target accordingly.
In terms of fresh economic data, we have the April Housing Starts report out at 8:30 am ET, and the market forecast calls for total housing starts to reach 1.42 million units, up from 1.321 million in March. In the report, because of the potential multiplier effect on the economy, the focus will remain on the single-family housing market and how the April figure stacks up against the 1.022 million March figure.
We’ll be watching this given Builders FirstSource BLDR and D.R. Horton DHI in the Bullpen.
Later in the morning, April Industrial Production will be reported, adding another view on the manufacturing economy. Once these figures are out in the wild, the Atlanta Fed will update its GDPNow model for the current quarter, which was revised yesterday to 3.8% from 4.2% following the release of April CPI, PPI, and Retail Sales data.
Today also sees another wave of Fed speakers including Richmond Fed President Tom Barkin (10:00 am ET), Fed Vice Chair for Supervision Michael Barr (10:00 am ET), Cleveland Fed President Loretta Mester (12 pm ET), and Atlanta Fed President Raphael Bostic (3:50 pm ET).
Coming off yesterday’s April CPI report that showed core CPI improved to 3.6% on a year-over-year basis and softer than expected April Retail Sales, the market warmed to the idea of a September rate cut.
However, 3.6% is still far from the Fed’s 2% target. And while we don’t expect the Fed will wait until that target is reached to begin dialing back currently restrictive monetary policy, we see a high probability today’s Fed speakers will note the progress found in yesterday’s CPI figures but signal the central bank will need to see “more good data” before embarking on a rate cutting cycle.
Our thinking is the Fed will want to see core CPI move sustainably below the 3% level before it softens its language on rate cut timing.
At the time of publication, TheStreet Pro Portfolio was long WMT, AMAT.
