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- 👉 The Investing Week Ahead: All About Retail
👉 The Investing Week Ahead: All About Retail
& Elon interviews Trump...
Welcome to your new week.
Thanks to the 830+ of you that have signed up for the Rich Habits Pre-IPO / Angel Investing Webinar this Thursday! We have some special announcements coming up and look forward to hosting you!
You can click here to sign up for free. It will be recorded if you can’t make it.
Now let’s dive in!
Key Earnings Announcements:
Mass retailers like Home Depot and Walmart will give us a heat check on the American consumer.
Monday (8/12): Barrick, Monday.com, Rumble
Tuesday (8/13): Home Depot, Nu Holdings, On Holding, Paysafe, Sea Limited, Tencent Music Entertainment
Wednesday (8/14): Brinker International, CardinalHealth, Cisco, Dole, Performance Food Group, UBS,
Thursday (8/15): Alibaba, Amcor, Applied Materials, Coherent Corp, H&R Block, JD.com, John Deere, Walmart
Friday (8/16): Flowers Foods
What We’re Watching:
Home Depot’s most recent report featured an earnings beat and a revenue miss — mostly due to shoppers postponing bigger discretionary projects. High interest rates were blamed as a primary reason, however the home improvement giant still reaffirmed full-year guidance — which was a big positive.
This week, analysts are expecting a bit more of the ‘consumer spending slow-down’ trend. Both revenue and profits are projected to decline slightly, with Q2 sales expected to be $42.6B (compared to $42.9B the year before).
Like Home Depot, Walmart’s most recent report also featured an earnings beat and a revenue miss. The highlights included gains with high-income shoppers, a +22% jump in e-commerce growth, and +24% quarterly growth from the company’s newer advertising business.
On the negative side — Walmart CFO John David Rainey admitted that consumers’ “wallets are still stretched.” Walmart investors will want to see the advertising and subscription-based membership program (Walmart+) have quality updates from this earnings report. All economic signs point to a consumer that’s increasingly struggling — so Walmart could be leaning heavily on the newer business segments.
Investor Events / Global Affairs:
Oil activity is getting attention, Elon Musk is interviewing President Trump, and Israel believes that an Iranian attack seems imminent.
Oil Production Slowdown is in the Spotlight
OPEC+ is reconsidering its plan to ease production cuts in October due to concerns over underwhelming global oil demand, particularly in China and the U.S., where economic growth and recession fears have impacted market sentiment.
The Joint Ministerial Monitoring Committee reaffirmed the group's intention to add supply but also indicated that this could be delayed or reversed based on market conditions. While OPEC maintains an optimistic demand growth forecast of 2.2 million barrels per day (BPD) for 2024, this estimate diverges by over 1.0 million BPD from the International Energy Agency’s (IEA) predictions.
Analysts warn that demand growth must accelerate to prevent a price drop if more supply is added. Saudi Aramco aligns with OPEC's outlook, expecting global demand to increase by 1.6 to 2.0 million BPD in the second half of 2024.
“The US fuel making complex — a key factor in global supply-demand balances — is faltering as consumption stalls and profit margins shrink.
The slowdown bolsters the possibility that an oversupply of crude is looming, a threat that has limited oil prices to a roughly 7% gain this year despite OPEC+’s production cuts and rising geopolitical tensions.”
— Lucia Kassai, Bloomberg
Elon Musk Interviews Donald Trump Monday Night
Tonight on X (Twitter) — Elon Musk will be interviewing Donald Trump. According to the graphic above, the interview will be hosted from Trump’s X account — which has hardly been used over the last few years.
This is expected to be one of the — if not the — largest audiences ever for a live interview. We’re genuinely curious to see how well X can hold up with all of the traffic for this. Perhaps this will ignite a revolution of other live interviews of high-profile individuals on platforms like Instagram (META) and TikTok?
Eager to see Mark Zuckerberg’s next move!
Not to mention, Trump has his own competitor to X — Truth Social. Shareholders of Trump Media & Technology Group (DJT) will be anxious to see if Trump will go back to using Twitter regularly again.
Israel Prepares for “Direct Iran Attack”
Israeli intelligence believes that Iran may launch a direct attack against Israel within the next few days — a significant shift from earlier assessments that international pressure was restraining Iran.
The latest evaluation, formed in the past 24 hours, suggests that this action is in retaliation for the assassination of Hamas Political Bureau Chief Ismail Haniyeh. There is an ongoing internal debate in Iran between the Revolutionary Guards, who advocate for a harsher response, and the new Iranian president and his advisors, who are more cautious.
The importance of Iran’s actions cannot be overstated. With how chaotic things have been over the last few weeks — a direct attack on Israel from Iran could really take things to the next level.
Major Economic Events:
Inflation for consumers, inflation for producers, and retail sales.
Monday (8/12): Monthly U.S. Federal Budget
Tuesday (8/13): Core PPI, Core PPI Year over Year, NFIB Optimism Index, Producer Price Index (PPI), PPI Year over Year
Wednesday (8/14): Consumer Price Index (CPI), Core CPI, Core CPI Year over Year, CPI Year over Year
Thursday (8/15): Business Inventories, Capacity Utilization, Empire State Manufacturing Survey, Import Price Index, Import Price Index Minus Fuel, Industrial Production, Philadelphia Fed Manufacturing Survey, U.S. Retail Sales
Friday (8/16): Building Permits, Consumer Sentiment (Prelim), Home Builder Confidence Index, Housing Starts
What We’re Watching:
The Consumer Price Index (CPI) in the U.S. rose by +3% year-over-year to 314.18 points in June 2024 — following a +3.3% increase in May and below the market consensus of a +3.1% advance.
The CPI has averaged 124.17 points from 1950 until 2024, reaching an all time high of 314.18 points in June of 2024 and a record low of 23.50 points in February of 1950.
This week’s report (for July 2024) is expected to show a +0.2% month-over-month increase, and a +3.0% yearly increase.
Producer prices in the U.S. increased +2.6% year-on-year in June 2024 (the most since March 2023) — accelerating from an upwardly revised +2.4% gain in May and above market expectations of +2.3%.
Producer Prices Change in the United States averaged +3.1% from 1950 until 2024, reaching an all time high of +19.6% percent in November of 1974 and a record low of -6.86% in July of 2009.
This week’s report (for July 2024) is expected to show a +0.2% month-over-month increase for both the PPI and Core PPI. Expectations for the yearly increase have not yet been released.
In June — U.S. retail sales excluding autos rose by +0.4%, marking the most significant increase in three months. Total retail sales were flat, with a -2% drop in auto dealer receipts restraining overall growth.
The strong performance in non-auto sectors suggests that consumers regained confidence by the end of the second quarter, despite ongoing economic pressures like high interest rates. Additionally, the control-group sales, which influence GDP, saw a robust +0.9% rise, indicating resilience in consumer spending on goods.
This week — we find out how retail sales turned out for July.
Expectations are that retail sales rose +0.3% in July from the prior month. Excluding gas and autos, expectations are for a +0.2% increase. Anything less than this will cause increased worry about the economy.
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Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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