Stock Market Today Mid-Morning Updates
On Thursday, the Dow Jones Industrial Average is down by over 530 points as investors continue to weigh in on Fed rate hikes and the consequences of rising inflation. Furthermore, investors are also eagerly awaiting for a barrage of second-quarter earnings that will begin next week to get a glimpse of the state of the economy. CEO of Wells Fargo (NYSE: WFC), Charles Scharf says that the economy is not prepared for future rate hikes that the Fed has hinted on. He also cites that while consumers and businesses continue to remain strong today, they could see deterioration if the Fed continues to raise rates.
Shares of Acuity Brands (NYSE: AYI) are in focus today after it beat top and bottom-line estimates for its latest quarter. Constellation Brands (NYSE: STZ) beat earnings and revenue today. It posted an earnings per share of $2.66, $0.14 above estimates. Xerox (NASDAQ: XRX) is down by 2.92% today after its CEO, John Visentin died at age 59 due to complications from an illness. COO and President Steve Bandroczak is now interim CEO.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are down by 3.73% today while Microsoft (NASDAQ: MSFT) is also down by 2.63%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading lower on Thursday. Among the Dow financial leaders, Visa (NYSE: V) is down by 2.96% while JPMorgan Chase (NYSE: JPM) is down by 3.31%
Shares of EV leader Tesla (NASDAQ: TSLA) are down by 3.11% on Thursday. Rival EV companies like Rivian (NASDAQ: RIVN) are also down by 5.48%. Lucid Group (NASDAQ: LCID) is down by 3.84% today. However, Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading lower today as well.
Dow Jones Today: U.S. Treasury Yields Drops To 3.03% On Core Personal Consumption Reading Release; Bitcoin Slides Below The $20,000 Mark
Following the stock market opening on Thursday, the S&P 500, Dow, and Nasdaq are trading lower at 2.02%, 1.76%, and 2.87% respectively. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is down by 2.76% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also down0 by 1.93%.
The benchmark 10-year U.S. Treasury yield edged lower to the 3% mark today as the Fed’s preferred gauge was released today. Diving in, the core personal consumption expenditure prices rose by 4.7% year-over-year. This is 0.2 percentage points less than the previous month but still at multi-decade highs. The price on Bitcoin continued its slip today, briefly dropping under $19,000 before a slight rebound. The cryptocurrency is down by over 50% this year and off about 70% from its all-time high in November. Often poised as an inflation hedge, the cryptocurrency market has been under pressure in recent months like how other assets are.
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Walgreens Boots Alliance Reports Strong Quarter And Reaffirms Forecasts
Also in the stock market today, we have Walgreens Boots Alliance (NASDAQ: WBA) which has just reported its third-quarter financials for fiscal 2022. The company says that it has strong execution across its segments, with results broadly in line with expectations. Diving in, It posted an adjusted earnings per share of $0.96 for the quarter. For reference, this would be versus the consensus figure of $0.92. Total sales for the quarter were $32.59 billion for the quarter.
Notably, its U.S. segment contributed to a huge chunk of total sales this quarter, at $26.7 billion. However, total sales in the U.S. declined by 7.1% year-over-year, driven by a decline in the AllianceRx Walgreens business. Comparable sales increased 1.8% year-over-year. Throughout the quarter, Walgreens reports that its locations administered 4.7 million vaccines. This would represent a notable decrease from the 11.8 million vaccine doses administered in its previous quarter. Despite this deceleration in pandemic-related sales, Walgreens continues to find ways to adapt to the current operating environment.
Evidently, the company’s expansion of its online services during the quarter would be commendable. This is mainly through its efforts to offer curbside pickup and delivery. The likes of which would allow Walgreens customers to get their daily essentials through the pharmacy chain. Overall, Walgreens notes that its U.S. digital sales are up by 25% year-over-year. As the company aims to navigate the shifting consumer healthcare market, WBA stock could be worth keeping an eye on.
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Home Furniture Retailer RH Slides On Lowered Guidance For Fiscal 2022 Outlook
Shares of RH (NYSE: RH) are down by over 12% on today’s opening bell. This comes after management had announced revisions to its outlook for its fiscal 2022. According to RH, among the core reasons for this is decelerating consumer demand for the second half of the year. It says that taking into account the macro-economic conditions and its current business trend, it assumes that demand will continue to soften during the remainder of its fiscal year. In its press release, RH anticipates annual revenue to be lower by between 2% to 5% year-over-year. Adjusted operating margin will be in the range of 21% to 22%.
Providing some extra context to all this is RH CEO, Gary Friedman. He explains, “With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year.”
Mr. Friedman concluded, “While we anticipate the next several quarters will pose a short-term challenge as we cycle the extraordinary growth from the COVID-driven spending shift, shed less valuable market share as we continue to raise our quality, and choose not to promote our business while we navigate through the multiple macro headwinds, we continue to believe our long-term investments will enable us to drive industry-leading performance over a longer term horizon.” The company also says that it has not repurchased any shares since announcing the expansion of its common stock repurchase authorization on June 2, 2022. Given all of this, should you be paying attention to RH stock given its current predicament?
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