MAY 18 — Wall Street’s main indexes were set to open higher today after better-than-expected results from Walmart and Home Depot signalled strength in consumer demand against the backdrop of rising prices.
Walmart, the world’s biggest retailer, gained 3.5 per cent in premarket trading after raising its full-year earnings forecast as additional stimulus checks increased spending for apparel and electronics.
Top US home improvement retailer Home Depot’s shares rose 2.2 per cent after beating quarterly same-store sales estimates, allaying concerns that the company would see pandemic-fuelled demand easing as vaccinations gather steam.
Macy’s climbed 4 per cent after the department store operator raised its forecast for annual sales and earnings. Rivals Nordstrom and Kohl’s Corp added about 2.6 per cent and 2.1 per cent.
“Walmart and Home depot seem to have benefited out of higher consumer spending and as the lockdowns ease and as we return to normality, we expect spending to increase in the retail and real estate sectors,” said Sean O’Hara, president of Pacer ETFs in Pennsylvania.
“The market still remains fearful of runaway inflation and the narrative is driven by the game of catch-up from the supply chain side while fundamental earnings and GDP performance are not back at pre-pandemic levels.”
Wall Street’s main indexes fell yesterday on fears that an overheating economy could prompt the Federal Reserve to rein in its monetary support following a spike in volatility last week after strong inflation readings.
The benchmark S&P 500 is about 2 per cent from its all-time high, while the tech-heavy Nasdaq is about 6 per cent from its April 29 record high.
Fund managers trimmed their overweight positions on technology stocks to a three-year low as inflation worries left growth stocks vulnerable to a pullback, and turned overweight on UK stocks for the first time in sever years, a survey from Bank of America showed.
Minutes from the Fed’s April policy meeting will be parsed tomorrow for the central bank’s view of the economy.
At 8:15 a.m. ET, Dow e-minis were up 67 points, or 0.2 per cent, S&P 500 e-minis were up 8.75 points, or 0.21 per cent, and Nasdaq 100 e-minis were up 83.5 points, or 0.63 per cent.
Tesla Inc dropped 1.5 per cent after the family office run by “Big Short” investor Michael Burry disclosed a short position worth more than half a billion against the electric-car maker.
Wells Fargo & Co dipped 0.4 per cent after Berkshire Hathaway Inc has sold nearly all of its holdings in the lender, abandoning a more than 31-year-old investment.
China’s Baidu Inc gained 2.9 per cent after reporting a 25 per cent rise in quarterly revenue, powered by advertising on its core search and video-streaming platforms.
Shares of EV charging equipment makers Chargepoint Holdings and Blink Charging Co gained 1.2 per cent and 2.4 per cent as President Joe Biden was set to make the case for his US$174 billion electric vehicle plan today. — Reuters