Can Retailers’ Earnings Numbers this Week Save the Sector’s Disastrous Earnings Season?

Last, week stocks’ fall was limited – despite the retail sector collapse, the disappointing numbers from Snapchat (SNAP) and the blasé rebound in the week’s economic figures in respect to what the market had been expecting. More than that, the market barely responded to the biggest Washington drama since Trump took office, i.e. the sacking of the FBI chief, James Comey, who had been investigating Trump for his ties to Russia during the election campaign.

The best earnings season since 2011 is nearing its end, with the S&P 500 and the NASDAQ basking near their all-time highs. Perhaps the biggest concern for some market analysts is precisely the fact that concern is nowhere to be found!

The largest intraday movement on the S&P 500 in almost 3 weeks was barely 0.4%! The small intraday moves in the market prompted the VIX to close at a 20-year low last week. The VIX is thought of as a trustworthy gauge of investor anxiety. Some investors – beset with concern that’s technical in nature – are more than anything else worried about the respective levels of complacency or optimism in the market, but that, in of itself, isn’t an indication that the market has peaked.

The S&P recorded 2 closing highs last week; each of which, though, were lower than the intraday high recorded on March 1, i.e. slightly beneath the 2,401 point level. The NASDAQ, which closed last Friday almost 4% above its March 1st closing high, succeeded in recording a high based on closing price as well as a high based on intraday movement.

If it seems, though, that the market as a whole is cruising along on calm and soothing waters, it would seem that the earnings season – which has been impressive to date – has some rather unpleasant surprises in store for this week. This week, investors will be awaiting the earnings numbers of Walmart (WMT), TJX, and Home Depot (HD) – along with those of other retailers – in the hopes that this coming week they’ll be able to alter the grating tone coming out of the sector.

Retailers always report in the last leg of the earnings season, 450 of the companies on the S&P 500 having reported as of Friday. The pressure is on from the digital online marketplace, something readily felt by department stores like Macy’s (M), Kohl’s (KSS), Nordstrom (JWN) and Dillard’s which all fell by double-digit percentages last week after releasing their disappointing numbers. These stocks’ losses only got worse on Friday, M ending down 18% on the week, JWN falling 16% come week’s end.

Large brick and mortar chains are getting pressed to the wall with too much floor space, in a world where mall shopping is becoming increasingly obsolete in the face of online purchases. The chain sale figures released on Friday pointed to a 0.4% rise for the month of April. Having come out beneath analyst projections notwithstanding, the figures still show that consumers are opening up their wallets, but are changing their mode of purchasing. April’s digital sales rose 1.4%.

Walmart (WMT) will be reporting this coming Thursday, with TJX and Home Depot (HD) reporting earlier in the week, on Tuesday, retailers again expected to be the dominant force this week. Of the three, only WMT is expected to report an earnings decline – of about 2%. Additional earnings reports are expected from the discount chain, TGT, along with the fashion apparel chains, GAP (GPS) and Urban Outfitters (URBN).

S&P 500 earnings reports have recorded growth of almost 15% for Q1, in large part driven by the energy sector’s year-over-year surge in quarterly earnings.

Bank of America analysts conducted a study of both the comments and commentary made by firms at the time of their earnings conference calls, in order to gauge the company’s standing vis a vis future earnings. They found that companies are more optimistic than they have been in a long time. According to the findings, firms’ word choice tends to include more words like “better” as opposed to “worse” or “weaker” – in comparison to 2010.

IndexLastDaily changeR2R1PPS1S2
DJX20,897(-0.11%)Down     
SPX2,391(-0.15%)Down236.91236.18235.30234.57233.69
Nasdaq6,1210.09%Up132.73132.39132.04131.70131.35

In Summary for the Week:  The S&P 500 fell 0.3%, the NASDAQ ending up with gains of 0.3%.

Have a great trading week!

 

Economic Calendar

 

DAYTIME (EST)EventForecastImpact
Monday8:30Empire ManufacturingMedium
Tuesday8:30Housing StartsMedium
Tuesday9:15Industrial ProductionMedium
Wednesday10:30Crude Oil InventoriesLow
Thursday8:30Initial ClaimsHigh
Thursday8:30Philadelphia FedMedium
Thursday10:00Leading IndicatorsMedium

  

Earning Calendar

 

SymbolCompanyAM/PMDay
TRVGtrivago N.V.AMMonday
VIPSVipshop Holdings LimitedPMMonday
LBTYALiberty Global plcPMMonday
DKSDick’s Sporting Goods, Inc.AMTuesday
SINASINA CorporationAMTuesday
WBWeibo CorporationAMTuesday
TJXThe TJX Companies, Inc.AMTuesday
HDThe Home Depot, Inc.AMTuesday
JACKJack in the Box Inc.PMTuesday
URBNUrban Outfitters, Inc.PMTuesday
AEOAmerican Eagle Outfitters, Inc.AMWednesday
TGTTarget CorporationAMWednesday
LBL Brands, Inc.PMWednesday
FLOFlowers Foods, Inc.PMWednesday
CSCOCisco Systems, Inc.PMWednesday
WMTWal-Mart Stores, Inc.AMThursday
BABAAlibaba Group Holding LimitedAMThursday
RLRalph Lauren CorporationAMThursday
PLCEThe Children’s Place, Inc.AMThursday
GPSThe Gap, Inc.AMThursday
ADSKAutodesk, Inc.PMThursday
ROSTRoss Stores, Inc.PMThursday
MCKMcKesson CorporationPMThursday
AMATApplied Materials, Inc.PMThursday
CRMSalesforce.com, inc.PMThursday
DEDeere & CompanyAMFriday
CPBCampbell Soup CompanyAMFriday
FLFoot Locker, Inc.AMFriday

  

Today’s Picks – Day Trading!

SymbolBreakoutBreakdownMomentumMomentum
ED$80.21 JUNOCYBR
ATVI$58.23 DDDJWN
NXPI$107.02 MOMORL
V$93.00  CVS
JWN $40.70  
HP $56.73  
FLR $46.50  
LB $49.00  

 

New York Strategy Swing

#DateStockLong\

Short

StatuesData CloseProfit\

Loss

13.4.2017ARNCLongClose31.3.2017-2.52%
23.4.2017GMEShortClose10.4.2017+1.95%
35.4.2017IPXLLongClose11.4.2017+7.03%
413.4.2017NKTRLongClose21.4.2017+0.61%
525.4.2017LULUShortClose2.5.2017-0.17%
626.4.2017GNCLongClose28.4.2017-4.39%
728.4.2017CARALongClose1.5.2017-3.23%
81.5.2017AAOILongClose2.5.2017+0.54%
93.5.2017SCSSLongClose9.5.2017-1.71%
104.5.2017CRZOShortClose5.5.2017+0.30%
118.5.2017WTWLongOpen +6.39%
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18      

 

Today’s Picks – Swing “New-York Strategy

No.1 –    AAN

Company NameAaron’s
Entry Point35.24
Stop Area34.64
1st Target35.70
Swing Target37.67
Avg. Volume800K
SectorServices | Rental & Leasing Services
Earning Date
Risk RateNormal
Risk\Reward Ratio4.05:1