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Walmart

XLP - Staples are lagging the market XLP has had horrific downside price action over the last several weeks. As it approaches the Weekly 200 MA I do anticipate a bounce to occur. Not many sectors are near the weekly 200 MA. Buying this at the Weekly 200 MA has proven to be a great long term entry for investors. If a bounce occurs and bearish consolidation on the weekly chart occurs, this sector will likely be a good short side play. I would never short this sector now since its had a big decline. A bounce is more favourable at this point.
AMEX:XLP
by Trading-Capital
Target - Why Is Everyone Desperate To Long Disasters?Target is another example of the so-called "contrarian" trade that circulates on financial social media where, somehow, everyone puts on their VERY SMART PERSON baseball caps and gets long because it MUST BE TIME FOR THE MOTHER OF ALL SHORT SQUEEEEEEEEEEEZES. And yet time and time again it never works. Paypal is a really fine example. Paypal - Going Long In a Bear Market? I mean cool, if you bought at $59 in May (you didn't) and sold at $77 on the last two days of July (you didn't) then you made $18 a share and are a VERY SMART PERSON. And then it gave it all back in a day on earnings and people are killing themselves buying the dips again. Same with T-Mobile, Verizon, and Disney Disney - Is Your Compass Upside Down? It's at long time lows. Went up a bit on earnings. And then gave it all back over the span of a few days and people are still "buying teh dip," primarily because some Signal or Discord or picture of a girl on Musk's new Xeeeeeeeter app said "muchwow prize target nao $120 be a winner like me and BUY CALLS." These are things that you need to stop doing. When something trades like a bag of doorknobs for a long period of time it's because it really is a piece of crap that will eventually go lower, and so instead of buying that dip, sell that rip. Better yet, ignore this kind of junk and trade what is actually trending, the indexes, or just go outside for a month or two and come back when the chop is over and save your trouble. Look at the monthly bars on Target. "Zoom out," they always say. I understand this because in the first two months I wanted to go long on this thing for at least a retrace to $150 too. But instead the old "support" has become new "resistance." And this tells you that new lows are most likely coming. And when Target flirts again with $100 people will go even more bigly long. The longs trapped from $125 and $130 will double their position. But this piece of crap probably won't bounce. Have you actually been on their website and looked at the clothes they sell? Look at stuff like women's intimates (lol). Do you know they have an isle in the stores devoted to fleshlights? Do you know that they allow people to steal? That, my friends, is real "fundamental analysis". What's the bull case? That someone told you the EllLioT WaVeS SaId $160 MiniMum? This is a chain that was bounced out of Canada because it was Zellers 2.0. These markets, all the equities, all the commodities, the entire world is in for a rough future. The rough future might only last for a few months, but it might last for a few years. If you don't "paradigm shift" ahead of schedule, by the time you do get your paradigm shifted forcefully, it will be too late for crying. And so my only wish with these things is to wake you up. China is the world's central stage and what's going on with Xi Jinping, the Chinese Communist Party, and its 24-year persecution against Falun Dafa is the fundamental story that everything else is a slave to. Time to wake up, my friends.
NYSE:TGTShort
by LordWrymouth
1
Walmart - Congratulations. We Now Have "Confirmation."Walmart is another stock that, for some reason, people want to be bullish on. It's probably because Marxist social marketing platform Reddit's public relations firm nestegg r/WallStreetBets said so, or some GPT instance on StockTwits said so. Yet it's another old company with an old business model that is anything but good. I haven't been to a Walmart in the United States in years, but the ones in Canada aren't even cheap. They attract people from low social classes and people who moved here from other countries, but are seriously often one of the most expensive options out there and even shopping online are an automatic skip. Yet people want to get long. This stock is similar to Target Target - Why Is Everyone Desperate To Long Disasters? And Disney Disney - Is Your Compass Upside Down? And Paypal Paypal - Going Long In a Bear Market? In that none of them are one bit bullish, and yet people are rallied by a certain force into believing that it's time to BUY THEM CALLS because it's GOING TO SQUEEZE or something. And yet when stuff like Apple or Meta trends upwards for 5-8 straight months you're told to short every pop while it runs away on you. China's economic problems are seriously escalating and at a frightening speed. The effort is underway to destabilize the Chinese Communist Party, so long as Xi Jinping is its leader and the President of China, at least. The ultimate endgame is to produce a situation where the CCP and/or Xi falls, but what the International Rules Based Order and its banking cartel want is not to have China's 5,000 years of dynasties and traditions return, but to replace the existing regime with something of a submissive soyregime that's nested out of Taiwan. And because of this, retail stores are particularly at risk because everyone just loves and loves to put their hands and get their hands in Shanghai where the Jiang Zemin faction is. When the day comes, the CCP will be gone and the Jiang faction and the CCP's 24-year persecution against Falun Dafa's 100 million spiritual cultivators and all that organ harvesting will become an international story, the only one that matters. And these companies who have been supplying blood to "China" all these years will really wind up going Blockbuster and delisting. Walmart's monthly shows us that we have a raid on the '22 all time high. The purpose of these kinds of events is to take out the funds and whales who use stop loss rules. And if it's really true that Walmart isn't aiming for $180, then it means the next set of rules-based funds and whales to hunt is on the low side, which is a painful $50 away. On the weekly, this ramp towards the top has been an amusing 52 degrees. Trendlines are created to be broken because you're told that technical analysis and not price action is somehow important. The reverse bullish upside down inverse bat pattern harmonic RSI MACD divergence clouds are definitely the way to understand the market, not the places where people are told to put their stops to "mAnAGe ThEiR RiSk." And so the moons have come together on today's earnings to tell us that it's probably time to sell the rip. Walmart has produced: 1. A failure swing 2. The rejection came on Q2 earnings as a catalyst/news driver 3. Months and months of insider sales 4. At a time when indexes are toppy 5. Jackson Hole, the biggest Federal Reserve policy meeting of the year, is a week away 6. JP Morgan is long some 15,800 puts with a strike of SPX 4,225 expiring September 29 that have never been in the money since the quarter changed And so the trade setup is simple. Don't try to buy the dip. The dip can't be bought. Instead sell a rip back to the $158 pivot Buy long duration puts Sit on your hands and go outside Take a girl on a date Listen to music and have wine with her Tell her that her hair is pretty Come back a few weeks later and roll them out Rinse, repeat until $99 Good luck, my friends. It's time to stop listening to the Internet and social media machine. People with low follower counts and low traffic can tell you the truth, but the big dogs are promoted because the purpose is to use you as exit liquidity lol.
NYSE:WMTShort
by LordWrymouth
1
Walmart in a bullish channel.Walmart - 30d expiry - We look to Buy at 154.33 (stop at 150.33) Price action continues to trade around the all-time highs. Trading within a Bullish Channel formation. We look to buy dips. The primary trend remains bullish. Trend line support is located at 154. This stock has seen good sales growth. Our profit targets will be 164.33 and 166.33 Resistance: 159.50 / 161.00 / 163.00 Support: 157.50 / 155.00 / 154.00 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
NYSE:WMTLong
by VantageMarkets
Walmart (WMT) | The Long-awaited Breakout!Hi, Waited for the end of June and we got the highest monthly candle close in Walmart history! The area between $150 to $154 has been like a nightmare for WMT. As you see in the image it has tried many many times to make a breakthrough. Finally, it happened, barely but still, the price of Walmart has got the confirmed move, at least I like to think like that. Literally, investors are ready to pay higher prices for WMT stock, we got that "letter" from investors, we take it as a sign and we are ready to make a buy from the current prices to $145. This idea shows also how important is technical analysis! No matter what the WMT stock does from now but if you invested before that breakout (after the price reached the first time $150), then your money has been stuck for half a year to two years (depending on when you discovered it) in this asset! In the meantime, you see that almost the entire market is rallying. So, if you have such a strong area, as Walmart has there around $150, then it is always wise to wait for a little letter from investors that they are ready to pay the first time, atm within three years, the highest price than before! As the JPMorgan survey says: more profitable is to buy when the market has made an all-time high than on any random day. Again, it will confirm that the timing/technical analysis plays a key role in investment decisions! * Considering technical analysis then the optimal buying zone should stay from current prices to $145. * First target is $180 and currently the major one should stay around $200 Good luck, Vaido
NYSE:WMTLong
by VaidoVeek
WALMART in need of a short term technical correction.Walmart has been trading inside a Channel Up since March and just formed a Higher High Top, same as on May 10th. The main Support is the MA100 (1d) and long term the MA200 which is holding since October 21st 2022. Trading Plan: 1. Sell on the current market price. 2. Buy at 152.00 as long as the candle is closing over the MA100 (1d). Targets: 1. 152.00 (bottom of the Channel Up and 0.5 Fibonacci level). 2. 164.00 Tips: 1. The RSI (1d) also formed a pattern that is consistent with market tops since 2022. Please like, follow and comment!!
NYSE:WMTShort
by TradingBrokersView
1
WalMart stock is accelerating!WalMart stock is accelerating! This chart shows the weekly candle chart of Wal Mart stock since the end of 2019. The graph overlays the golden section above the 2020 low point. As shown in the figure, the low point of Wal Mart stock in May this year just stepped back to 1.382 in the golden section of the figure, and the low point of the past three weeks just stepped back to 1.618 in the golden section of the figure! This shows that Wal Mart shares are in the early stage of accelerated growth, and the rate will probably break through the previous high! The next strong pressure level is the 2.000 position in the golden section of the graph (around 164.7)!
NYSE:WMT
by Think_More
Walmart primary trend remains bullish.Walmart - 24h expiry - We look to Buy at 139.11 (stop at 134.61) Levels below 140 continue to attract buyers. The primary trend remains bullish. This stock has seen good sales growth. Preferred trade is to buy on dips. A higher correction is expected. Our profit targets will be 150.11 and 152.11 Resistance: 150.00 / 151.12 / 153.00 Support: 148.15 / 147.00 / 145.00 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
NYSE:WMTLong
by VantageMarkets
Walmart: Within Reach 🙌Ever been to the supermarket and couldn’t reach the topmost rack? Walmart seems to have a similar problem, struggling to let go of the mark at $150.12 to hit the turquoise zone between $152.54 and $161.76. However, we expect the share to touch at this area soon to finish wave B in turquoise. This done, it should turn downwards, returning below $150.12 and slipping further below the support at $136.09 to complete wave (A) in magenta. After a short counter movement back above $136.09, the share should drop below the support at $117.27 and into the gray zone between $116.49 and $105.01 to place the final low of wave IV in gray, which should then initiate a new upwards trend. There is a 37% chance, though, that Walmart could shoot through the turquoise zone and conquer the resistance at $161-76 directly.
NYSE:WMT
by MarketIntel
Is it a good time to invest in Walmart stock?Amidst the global economic and political turmoil marked by high inflation and surging interest rates, some things remain constant, like people buying groceries at Walmart. However, the stock price of the world's largest retailer by revenue has dropped by 13% from its all-time high in April last year. The question is whether it's a good time to invest in the company or hold back. In the fiscal year that ended on January 31, 2022, Walmart's revenues stood at $611 billion, a 6.7% increase from the previous year. The same-store sales in the US or comps increased by 6.6%, and the e-commerce revenue in the country rose by 12%. Sam's Club warehouse brand sales also increased by double-digit percentages. Despite its already vast base, Walmart's revenues grew at a rapid pace, but the macroeconomic factors weighed on its margins. Gross margins fell from 25.1% in the fiscal year 2021 to 24.1% in the fiscal year 2022. Operating margins also fell from 4.5% to 3.3%. The rising costs of commodities and supply chain costs are responsible for this decline. During the Q4 2022 earnings report, the CEO stated that "In periods of inflation like this one, middle-income families, lower-middle-income families, and even wealthier families become more price sensitive." He also said, "Because of its price structure, Walmart should still be in a good position to perform well." The management expects the company's revenues to grow by 2.5-3% in the fiscal year 2023, which is more aligned with its historical performance. Walmart is an attractive investment for several reasons in the current economic and market environment. It's a stable and long-established company that has been in business for over 60 years. The company's massive size allows it to offer low prices continuously, which is particularly important during economic downturns. Additionally, Walmart is a consistently profitable company, with a net income of $11.7 billion last fiscal year. The company's bottom line looks appealing in times when investors favor solid assets over speculative growth stocks. Moreover, the company has been paying dividends since 1974, and the payments have increased each year. The management has enough flexibility to keep increasing the payout. On the other hand, some investors may choose not to invest in Walmart. The company's scale is an advantage, but it also means that it has limited reinvestment opportunities. Its sales have grown at an average annual rate of 2.7% over the past decade, in line with the US GDP growth rate. The company doesn't seem to have any room for expansion to outpace the economy. Furthermore, Walmart's stock price has only risen by 93% over the past ten years, compared to the S&P 500's growth rate of 152%. The company's inability to outperform the market during a time when asset prices were at their best due to quantitative easing does not bode well for its future earnings potential. Finally, Walmart's current valuation may not justify its price. The company's stock trades at a trailing price-to-earnings ratio of 33, which is more expensive than the broader market. Moreover, at a projected price-to-earnings ratio of 23, Walmart's stock also trades at a premium compared to its competitors, such as Target. This discrepancy doesn't seem reasonable, given that Target has grown its earnings faster than Walmart over the past ten years and had higher average margins. In conclusion, while Walmart's stock can be a good portfolio backbone and provide investors with a steady stream of income, it's unlikely to generate significant returns in the coming years.
NYSE:WMTLong
by FOREXN1
3
BBY Best Buy - A Ripe Opportunity for 50%Best Buy is a company that I never liked. However, recently I had to deal with them and found that the stores are in much nicer shape, the inventory is much better, the web experience is actually pretty clean, and moreover, at least here in Canada, there's actually nowhere else to buy electronics. They pretty much have the market cornered. What I found is that while prices were low because consumer spending is in the toilet, inventory is also low because China has been smashed up pretty hard by the Wuhan Pneumonia pandemic, and the situation with Xi and his Chinese Communist Party is likely to get a lot worse before it even begins to try to get better. You have to be careful with equity longs over the next 4 months, especially the more bullish it gets, because the Chinese Communist Party's collapse is the big black swan that nobody believes is coming, but that the US and Wall Street seem to know is on the way. When the calamity unfolds, a lot of things are going to change in the world. No human beings are really prepared for what is going to happen. Humans and governments always make their plans, but reality always gets the last laugh. What this ultimately means is that for the electronics sector, demand should increase because we're heading into the spring and summer months of the North American markets, but supply will be low because the guys who were making things have been disrupted, and in the worst way. In other words, we're looking at a bullish impulse inside of prevailing bearish conditions, which is the premium short setup. But often the best short setups are precluded by outstandingly easy long setups, which is where we're at with Best Buy. I currently believe that since the prevailing narrative across all markets has been so bearish for so long, that we're about to get a bear trap that will see equities and indexes dump rather aggressively, because everything is about to go off hard to the upside. I believe that the real market crash will begin to unfold somewhere around the end of July of this year, and in the meantime, markets are going to pump while Wall Street gets positioned on the real "Big Short." So for Best Buy, there are some nuances to the chart that's been setup. One is that on the monthly bars, the price action can only be described as unclear. COVID and October lows have never breached or even touched the long term trendline, and yet there's an unbroken double bottom at $49. While double bottoms normally give me a big reason to believe they're about to become a magnet, I think that going from $86 to $45 in the next few months is just really not the most likely option. On the weekly bars, we get a much more lucid situation: Weekly, Best Buy is still trading well below equilibrium of the range measured from the ATH to the October low, and under the 200 DMA. None of these are bullish factors, but we also want to buy weakness when going long. In terms of upside targets, Best Buy has an enormous gap over $116 that was never touched on the way down. Instead, the MM algo left a spike candle at $112 and proceeded to dumpster it. Both of these areas become targets to aim for on a long trade. On the daily candles, recent price action was clearly a breakout play against the 200 DMA, with the recent FOMC rate pump activity being a re-raid on the August of '22 highs. This means I expect a pullback near the lows, primarily because price algorithms like to return towards lows after taking big highs during news drivers. But I feel it's also very obvious on Best Buy because there's a nice fat gap under the equilibrium between October lows, the recent highs, and the daily 200 DMA. Upside from the $75 area to the $115 gap is 50% and the time horizon is roughly 3 months. Stop out if it sets a new low. Good luck, and don't get caught being afraid on coming price action. Even more importantly, don't get caught being greedy if markets start to pump. Humanity will soon face an enormous tribulation that will be hard to pass. More will be at stake than trading accounts.
NYSE:BBYLong
by LordWrymouth
4
WALMART : Fundamental View and Technical Analysis. It appears that more high-income consumers are now shopping at Walmart, which could be a sign of the growing economic pressures caused by rising interest rates, high inflation, and increased gasoline prices. Walmart recently reported its Q4 earnings, which showed strong revenue growth globally, with sales up almost 8% in constant currency terms to $164 billion. Sales at comparable stores (comp) were up over 8% YoY, while sales at Sam's Club were up 12% and 22%, respectively. E-commerce sales also saw a notable increase of 17% in the US. However, Walmart's growth in sales seems to be largely driven by price increases in groceries, with food inflation rising above the national rate. This could suggest that consumers are buying only the essentials, as sales for other merchandise like toys, electronics, home goods, and clothing have declined. Walmart predicts that US sales will grow a maximum of 5%, and earnings will fall to a range of $5.90 to $6.05 per share. While these challenges are concerning, Walmart still looks capable of continuing to gain market share even during a potential recession. In fact, its strength in groceries is worth noting, with comparable sales growing by tens of percent. However, since food inflation rose in the mid-tenths of a percent, well above the reported national inflation rate, it appears that retail sales growth is indeed driven by price increases. Moreover, more than half of the increase in grocery prices is attributable to high-income consumers who find it necessary to shop in the lower market. While this may be a long-term advantage for Walmart, as many of these new customers may stay with the company after inflation finally subsides, it suggests that these are particularly difficult times. When even high-income households are saving, it's a worrying sign for the rest of us. It's worth noting that Walmart is returning more cash to shareholders than it is generating in free cash flow, which may concern some investors. Cash earnings for the year rose to $12.2 billion, but Walmart paid out $6.1 billion in dividends and repurchased $9.9 billion worth of stock for a total of $16 billion. This is not what investors would like to see from the retailer for a long period of time. If you're an investor, you may want to consider using this opportunity to invest in protective stocks that may survive or even prosper during a downturn. While Walmart may not be a discount stock, it could still be a long-term refuge from any storm. However, a National Association for Business Economics survey warns that 58% of economists believe there is more than a 50% chance of a recession in the next 12 months, with 33% predicting it will come in Q2 and 21% believing it will start in the third. Overall, it's clear that Walmart's strong revenue growth is a good sign, but the challenges it faces, such as declining profits and the potential for a market downturn, cannot be ignored. As consumers continue to buy only the essentials and high-income shoppers opt for discounted groceries, it's important to stay vigilant and prepare for any potential economic challenges ahead.
NYSE:WMTShort
by FOREXN1
5
LOWE'S - Look For Longs. $245 Is the Target for ShortsQuick read, for once. Lowe's is down 7% following ER. Another ER dump. This is really notable for a few reasons: 1. Big moves on the first of the month always make me think reversals 2. Lowe's isn't really bearish on monthly or weekly bars 3. The real short setup for economic disaster is in the $240 range 4. Dump swept out weekly/monthly/daily sellside pivots 5. Gap fill 6. Overall market is not as bearish as it was during last Lowe's ER dump 7. Equities market makers love to "gamma squeeze" rip the other way after a little bit. However, the weekly bars do show a three drives-style pattern But it's only the wicks over range equilibrium and it's never traded to a deep premium, which is what you really want to see before new lows are going to be set. Monthly shows that this isn't a bear market, either. March 31 $200 calls lost $8.5 on the news. You still have to be super careful because of geopolitical risks: 1. The Chinese Communist Party has not reported a single COVID case since Jan. 10, and this is almost impossible to be real. The reality is that the CCP is likely very, very weak right now and could fall at any time. 2. Elon Musk has warned, which confirms with multiple other sources, that Russia is about to launch a very large scale offensive in Ukraine. He would know because Starlink is the only thing keeping Ukraine with even a shred of hope in the battle. Equities down, commodities up is what that will result in, just like when the war was launched last year. 3. When it's time for the CCP to go, and it's going to happen very soon, you can expect there to be a clash between the India-Russia-Saudi/BRICS type entities and the United States/NATO globalists because everyone wants China. All the "hawkish" chatter on "China" (note it's rarely ever against the CCP itself) (("China" is not "the CCP")) from America is gearing up to take over the Mainland by way of the globalist groomed Chinese nationals it has parented so as to install all the woke globalist things and completely ruin what little is left of the country's 5,000 year culture as they go for a real New World Order/One World Government With the way everything is acting I kind of suspect Lowe's may not be finished dumping, but imo this is one of those situations where one should "be greedy only when others are fearful." $186 would be a really sweet entry and you have to sit on your hands for 2 or 3 months or at least roll out your winners. See my Nasdaq/SPX/Dow calls for thoughts on the markets at large and potential timing. July is the target for when things really get scary.
NYSE:LOWLong
by LordWrymouth
A Leading Indicator for US EconomyCME: E-Mini S&P Retail Select Industry Futures ( CME:SXR1! ) Last Friday, the U.S. Bureau of Economic Analysis (BEA) released the latest Personal Income and Outlays Report. Personal income gained $131.1 billion (0.6%). Disposable personal income (DPI) added $387.4 billion (2.0%) and personal consumption expenditures (PCE) grew $312.5 billion (1.8%) for the month of January. Data shows that U.S consumer is resilient. Wage gains and inflation pushed spending growth to a two-year high. In the past decade, PCE gained 60% to $18 trillion. More recently, it surged 50% in the three years since the start of the COVID pandemic. The hotter-than-expected data indicated that US economy was nowhere near a recession. Additional data from the Bureau of Labor Statistics showed robust job growth in January and the lowest unemployment rate in half a century. Wary of bigger and longer-lasting Fed rate hikes on the way, all major US stock indexes turned negative in the month of February. As of last Friday, Dow Jones Industrial Average was down 3.8% month-to-date, while S&P 500, Nasdaq 100 and Russell 2000 recorded -2.6%, -0.8%, and -2.4%, respectively. Consumer Spending Outlook Consumer spending accounts for over two-thirds of U.S. economic activity. While PCE shot up more than expected last month, it is a lagging indicator and only confirms what happened in the past. Could U.S. consumers spend out of the peril of a recession? Retailer stock prices are forward-looking and reflect collective market consensus of how much free cash flow the retailers could earn, discounted by their cost of capital. There are indications that the shopping spree may be ending soon. Last week, Walmart said its U.S. consumer spending started the year strong, but that it expects households to back off through the year, producing weak fiscal-year U.S. sales growth of 2% to 2.5%. Home Depot said consumer spending is holding up, but that it expects a flat sales-growth year overall, with declining profits. This is a troubling signal. Retailers are supposed to benefit the most from growing consumer spending, but their stock prices have been losing steam in February. As of Friday, Home Depot ( NYSE:HD ) has a year-to-date return of -6.1%, while Walmart ( NYSE:WMT ) is mostly flat (-0.8%). Other retailers with declining stock prices include Dollar General ( NYSE:DG ), -13.2%; Walgreens Boots Alliance ( NASDAQ:WBA ), -3.7%, and Casey’s General Stores ( NASDAQ:CASY ), -3.8%. Walmart reported Q4 and FY2023 (ending January) revenue growth of 7.3% and 6.7%, respectively. Its operating income fell 5.5% and 21.9%, for the same periods. Digging deeper into Walmart’s earnings release, I find that it keeps sales growing by expanding its grocery business, but those sales are less profitable than general merchandise categories, where consumer spending is leveling off or shrinking. In theory, the growth of the biggest US retailer could be attributed to one of the following: • General growth of consumer spending (economic expansion); • Good business strategy and market share growth (economic trend unknown); • Consumer downgrades spending from department stores (economic downturn); • Price increases (inflation). My interpretation: 1. Consumers tend to keep up with the same living standards. When inflation hits, they maintain the same purchasing habit. Higher price drives spending growth. 2. As inflation deepens, consumers get fewer merchandises with the same budget. 3. Consumers downgrade purchases from department stores to discount stores, and switch to generic products from brand-named products. 4. In a downturn, higher-ended stores get hit first, and discount stores get hit last. While Walmart manages to grow revenue by doubling down on grocery and online businesses, the weakness in general merchandizes uncovers the real trend of consumer spending leveling off. We may disagree on whether a recession will be coming, however, data from Walmart and Home Depot indicates that the U.S. retail sector is in trouble. S&P Retail Select Industry Index S&P Retail Select Industry Index may be a better benchmark for the U.S. retail sector, comparing to the lagging government data and company specified performance metrics. The index comprises of stocks in the S&P Total Market Index that are classified in the GICS retail sub-industry. Total-10 constituents by index weight are: • Carvana (CVNA) • Wayfair (W) • Sally Beauty (SBH) • Stitch Fix (SFIX) • Boot Barn (BARN) • Children’s Place (PLCE) • Qurate Retail (QRTEA) • Leslie (LESL) • EVgo (EV) • Abercrombie & Fitch (ANF) One-year chart above shows that CME E-Mini S&P Retail Select Industry (SXR) Futures tracks the trend of S&P 500 but illustrates higher volatility in the first two months of 2023. Each SXR contract is notional at $10 times the index. At Friday settlement price of 7004, one March contract (SXRH3) is valued at $70,040. Each futures contract (long and short) requires an initial margin of $5,700. When the underlying index moves 1 point, trader’s futures account would gain or lose $10. At present, I do not foresee a decisive trend of the S&P 500. It could trend up, go down or move sideways depending on how the Fed rate hikes, inflation, unemployment and geopolitical crises play out. However, this does not prevent me from expressing a bearish view on the US retail sector. Establishing a SXR short futures position would be appropriate in the negative outlook. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
SShort
by JimHuangChicago