The economic data wasn’t dazzling yesterday nevertheless US markets continued to make back lost ground after Gaza extended its ceasefire and some placatory actions from Russia in sending humanitarian aid to Ukraine eased geopolitical tensions. Having closed at the highs yesterday, US markets look like opening pretty much unchanged.
Futures suggest the Dow will open 1 point lower at 16,650 with the S&P 500 expected to open unchanged at 1,946 and the Nasdaq 3 points lower at 3,946.
Both the Dow and S&P 500 have corrected around half off the losses that started in late July which could prove a technical tipping point as to whether US stocks can move back up to their all-time highs.
Particularly after yesterday’s disappointing results from Macy’s and a slowdown in monthly retail sales; the expectations are low for today’s big US retailers Wal-Mart (NYSE:WMT) and JC Penney (NYSE:JCP). Overall the earnings story has been good this quarter and today’s results are not going to change that but could impact near-term sentiment.
Wal-Mart is expected to earn $1.21 per share on revenue of $119.1bn down from $1.24 and up from $116.9bn a year ago. The stock is trading at $74 closer to the bottom end of its recent range between $72 and $80. The company has seen declining same-store sales in the US for the past 5 quarters and the stock has been trading sideways ever since the first decline.
The company’s CEO of its US business Bill Simon is stepping down later in the summer so the hope is that his replacement, New Zealander Greg Foran can turn things around. The fact that the company has change its top executive ahead of this quarter’s numbers suggest the decline in US same store sales probably hasn’t stopped just yet.
JC Penney is expected to lose -93c per share on revenue on $2.78bn. The company is loosing money but last quarter reported an increase in revenues and if that can continue this quarter the stock may be able to recover some more lost ground.
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