Key Highlights: Home Depot, Cisco, Walmart, Lowe's, Target

Fed minutes from the prior month indicated that the Fed would continue interest rates hikes until inflation comes down substantially. While there was no guidance, market is expecting a 50bps increase in the upcoming September FOMC meeting.

Moreover, advanced estimates for US retail and food sales for July were almost flat sequentially.

This resulted in overnight correction of major US indices with $S&P 500(.SPX)$ down -0.7% and $NASDAQ(.IXIC)$ falling -1.3%.

United Kingdom’s inflation saw a surge with CPI up 10.1% in July to a 40 year high with food prices and energy prices a key contributor to the rising prices. Europe has been the epicenter of an energy crisis given the ongoing geopolitical tensions that saw a reduction in natural gas flows through the Nord Stream 1 pipelines.

European equities also saw weakness with $DEKA E STOXX50(0MPR.UK)$ 50 falling by -1.3%.

Below are $Home Depot(HD)$ ,$Lowe's(LOW)$ ,$Wal-Mart(WMT)$ ,$Cisco(CSCO)$ ,$Target(TGT)$ 's 6 months performances.

$Home Depot(HD)$ recorded its strongest quarterly sales in 2Q.

Growth was better than expected on resilient repair and remodeling demand, bucking the slowdown in housing turnover amid rising mortgage rates.

Same store sales growth impressed, growing 5.8% due to rising prices while margins also impressed despite rising cost pressures.

Despite the inflationary issues and slower macroeconomic environment, no down trading has been observed from the latest quarter, as both professional and DIY segment sales still saw growth.

$Lowe's(LOW)$, a home improvement retailer that is relatively more focused on the DIY segment, also alleviated fears of homeowners sharply delaying their improvement plans.

$Cisco(CSCO)$ supply challenges have finally eased with less advanced chip capacity for enterprise networking easing. Revenue guidance is back to low single digit range of 2%-4% for 1Q and 4%-6% for FY2023.

This also signals that the demand for chips have started to falter for the chip sector, especially seen in the consumer-focused products such as personal computer and graphic processing units. Backlog for Cisco continue to remain at record highs mainly due to the previous supply issues, which provide visibility in the fiscal year ahead.

$Wal-Mart(WMT)$ ’s Q2 results showed a pivoting of consumer spending away from discretionary products to more of groceries and necessities, as inflationary pressures continue to hit households.

It saw weakness in apparel and electronics product sales as inventory levels surged.

$Target(TGT)$ , another big-box retailer, missed same store sales guidance, and saw profits falling by 90% in 2Q22 given its focus on discretionary products. Despite price reductions, Target continued to face inventory issues from consumers curtailing discretionary items.

# US Stocks Opportunities

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment124

  • Top
  • Latest
  • Matrix Rev
    ·08-19
    consumer stocks in play?
    Reply
    Report
    Fold Replies
    • jiann85
      [微笑]
      08-19
      Reply
      Report
  • 可以点赞一下我的评论m
    Reply
    Report
  • JM80
    ·08-19

    Thank you for your awareness. 

    Reply
    Report
  • lyKeoh
    ·08-19
    Good article to read
    Reply
    Report
  • 荼蘼7535
    ·08-22
    [微笑]
    Reply
    Report
  • Harresh
    ·08-22
    Ok
    Reply
    Report
  • ok
    Reply
    Report
  • cyberage79
    ·08-20
    nice
    Reply
    Report
  • TigerFly
    ·08-20
    👍
    Reply
    Report
  • leave a comment
    Reply
    Report
    Fold Replies
    • JeremyKok
      hi. please like and comment back. thank you.
      08-21
      Reply
      Report
  • Ok
    Reply
    Report
  • Like pls
    Reply
    Report
    Fold Replies
    • JeremyKok
      hi. please like and comment back. thank you.
      08-21
      Reply
      Report
  • wx1985
    ·08-19
    nice
    Reply
    Report
  • AMC GME
    ·08-19
    o
    Reply
    Report
  • PQlee
    ·08-19
    Reply
    Report
  • 👍
    Reply
    Report
  • Yes
    Reply
    Report
  • 不等了
    ·08-19

    666666

    Reply
    Report
  • 加油
    Reply
    Report
  • Tervien
    ·08-19
    k
    Reply
    Report