Stock Market – Three Issues to Watch within the Stock Market This Week
Stocks remained in rally mode final week, with each the Dow Jones Industrial Common and the S&P 500 gaining greater than 2%. These strikes put each indexes again close to file highs, with the Dow up 3% for the yr and the S&P greater by 11%.
A number of retailing giants will announce working outcomes over the subsequent few buying and selling days, together with Walmart (NYSE: WMT), House Depot (NYSE: HD), and BJ’s Wholesale Membership (NYSE: BJ). Beneath, we’ll check out the important thing traits that may ship their stocks shifting this week.
Picture supply: Getty Pictures.
1. Walmart’s buyer visitors
Walmart declares its outcomes on Tuesday, and traders expect large issues from the world’s high retailer. Gross sales jumped throughout the first half of 2020 because the pandemic lifted demand for staple merchandise whereas pushing buyers towards corporations with strong multichannel promoting platforms. Walmart took benefit of that method in Q2, with comparable-store gross sales rising 9% within the U.S. market as e-commerce roughly doubled.
This week’s report may present slower progress as COVID-19 disruptions settled down. However traders are hoping to see a greater stability between buyer visitors and common spending. Shopper quantity dove 14% final quarter, in any case, and will climb again towards optimistic territory over the subsequent few quarters.
In the meantime, Wall Street is interested by the place Walmart’s profitability may land throughout the vacation season forward. If shoppers proceed tilting spending towards shopper discretionary purchases like residence furnishings, then it might submit a robust end to a extremely unstable fiscal yr.
2. House Depot’s outlook
Traders are trying ahead to House Depot’s Tuesday earnings report. The house-improvement retailer’s stock has outperformed the market in 2020, regardless of a stoop in GDP that might usually level to robust promoting circumstances.
As an alternative, the pandemic hasn’t harm the nationwide housing market to this point, whereas it has lifted demand for home-improvement provides. House Depot’s home comparable gross sales grew a blistering 25% in its second fiscal quarter, in comparison with Lowe’s (NYSE: LOW) 35% spike throughout the identical interval.
Lowe’s will announce its outcomes on Wednesday morning, so traders will quickly have a clearer image of the market-share dynamics on this trade. We’ll additionally be taught whether or not Lowe’s remains to be closing the profitability hole and whether or not it’s persevering with to win clients in the important thing contractor area of interest.
The principle focus shall be on what House Depot CEO Craig Menear and his group need to say in regards to the well being of the housing market as they sit up for the shut of 2020 and a brand new, doubtlessly difficult fiscal yr forward.
3. BJ’s market share
BJ’s Wholesale Membership stock is outperforming the market and trouncing rival Costco to this point this yr. That rally shall be put to the take a look at on Thursday, when the retailer declares fiscal third-quarter outcomes whereas updating traders on its progress outlook.
Pandemic-related modifications to shopper habits have reworked BJ’s enterprise in current months. Customers have aimed to cut back the amount of their purchasing journeys, whereas spending extra on every journey. That development helped push BJ’s gross sales greater by 24% within the quarter that resulted in early August. For context, Costco not too long ago introduced that gross sales rose greater than 16% within the nine-week interval that ended on Nov. 1.
Whereas most of that improve in warehouse purchasing demand may be momentary, traders are enthusiastic about different doubtlessly enduring modifications to BJ’s enterprise, together with bettering market share, profitability, and progress prospects. BJ’s has additionally been in a position to direct a few of its surging cash move towards paying down debt, giving it extra flexibility to compete. These wins ought to assist some optimistic feedback from CEO Lee Delaney on Thursday when BJ’s particulars its growth plans.
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Demitri Kalogeropoulos owns shares of Costco Wholesale and House Depot. The Motley Idiot owns shares of and recommends Costco Wholesale and House Depot. The Motley Idiot recommends Lowe’s. The Motley Idiot has a disclosure coverage.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
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