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Coffee With Greta: Traders On Edge


DJIA Futures: -339 (-1%)

SPX Futures: -39 (-0.9%)

NASDAQ Futures: -149 (-1.2%)

Good morning friends!

Futures are falling as traders remain on edge about inflation and digest some disappointing corporate guidance.

Let’s get right to it!

Yields Climb As New Week Kicks Off

Treasury yields are climbing this morning as a new week kicks off with traders worried about inflation. 

The 2-year yield is up 6 basis points to 4.69% while the 10-year yield is up 8 basis points to 3.90%. 

The market will get more details on the Fed’s latest meeting and future plans later this week. 

The central bank is set to release the minutes of its February 1 meeting on Wednesday afternoon. 

The Fed’s favorite inflation gauge, the PCE price index, will also come out on Friday morning.

That data comes after both the CPI and PPI rose more than expected in January. 

Walmart Slides On Weak Outlook

Walmart (WMT) shares are falling 2.7% in premarket trade after beating Q4 expectations but issuing weak guidance. 

Here’s how the retailer’s results compared to analysts’ estimates: 

  • Adjusted EPS: $1.71 vs $1.51 expected
  • Revenue: $164.05 billion vs $159.72 billion expected

Revenue rose 7.3% year over year while same-store sales in the U.S. jumped 8.3%. 

Walmart also made progress on getting rid of inventory with levels roughly flat compared to a year ago and down 3% in the U.S. 

But the company issued soft guidance as it expects inflation to continue pressuring consumers this year.

Walmart forecast full-year adjusted EPS between $5.90 and $6.05 vs analysts’ estimates of $6.53. 

The CEO said, “If you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”

Home Depot Drops After Revenue Miss, Weak Guidance

Home Depot (HD) shares are down 4.4% in premarket trade after reporting mixed Q4 results and issuing a weak outlook.

Here’s how the home improvement retailer’s results compared to analysts’ estimates: 

  • EPS: $3.30 vs $3.28 expected
  • Revenue: $35.83 billion vs $35.97 billion expected

It was the first time Home Depot has missed sales expectations since November 2019. 

The company attributed that miss to lower lumber prices which impacted comparable sales by 0.7%. 

Home Depot said it expects earnings per share to decline by a mid-single-digit percentage this year, falling short of analysts’ expectations for EPS to be flat. 

The company also expects full-year sales to be flat vs analysts’ projections for a slight increase. 

Home Depot also announced it will spend $1 billion to give hourly workers a raise.  

Existing Home Sales Expected To Rise

The National Association of Realtors reports January existing home sales at 10:00 a.m. ET. 

That data is expected to show sales rose at the start of the year to a seasonally adjusted annual rate of 4.12 million units. 

It would be the first monthly increase in sales in 11 months.

That expectation comes after pending home sales rose 2.5% in December.

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