Robert Way
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New Apple product seen, but no livestream keynote. (0:21) Walmart commentary on tariff impact expected. (0:48) Traders eye FOMC minutes. (2:21)
The following is an abridged transcript:
Focus will be stock-specific this holiday-shortened trading week, with the economic calendar relatively light.
Two big household names will draw special attention: Apple (NASDAQ:AAPL) and Walmart (NYSE:WMT).
On Wednesday at noon ET, Apple will host a launch event. The announcement is expected to be conducted through a press release and promotional materials rather than a live-streamed keynote. A fourth-generation iPhone SE is widely expected to be featured , although there is speculation about a new MacBook Air, new iPad Air, or a surprise reveal.
Walmart reports fiscal Q4 earnings before the bell on Thursday and investors will be anxious for any commentary about the impact of tariffs on China.
According to SA Analyst Jeffrey Fischer, “Walmart concedes that a significant amount of merchandise is sourced internationally, but how much, and from where?”
“Several online sources offered varied estimates, but all of them suggested that products from China represented well more than 50% of the items on North American Walmart shelves.”
He estimates a hit on EPS could potentially boost WMT’s P/E above 100x.
Analysts are forecasting a quarterly EPS of $0.65 on sales of nearly $179 billion. Revisions have been bearish in the last 90 days, though, with 18 downward revisions to EPS numbers compared to 9 upward revisions. On the top line there have been 11 upward revisions and 10 downward revisions.
But Seeking Alpha analyst Skeptical2 says: “Walmart should be able to accelerate earnings growth with increased share buybacks as cash flow continues to grow, and the company should continue to drive impressive growth regardless of economic cycles in what is likely to remain a favorable operating environment moving forward. Existing earnings estimates are likely low as well, since management has also consistently guided conservatively.”
Also on the earnings calendar:
UFP Industries (UFPI), Noble (NE) and Transocean (RIG) report on Monday.
On Tuesday, Arista Networks (ANET), Medtronic (MDT), Cadence Design Systems (CDNS), Occidental Petroleum (OXY) and Vulcan Materials (VMC) issue numbers.
HSBC Holdings (HSBC), Analog Devices (ADI), Carvana (CVNA) and Garmin (GRMN) weigh in on Wednesday.
Joining Walmart on Thursday are Alibaba (BABA), Booking Holdings (BKNG), MercadoLibre (MELI) and Southern (SO).
On the economic front, the minutes from the last FOMC meeting arrive on Wednesday afternoon.
According to veteran Fed watcher Mott Capital, who runs Reading the Markets Investing Group, the recent data point to a strong labor market and inflation rates that appear to be accelerating, with the market taking notice as 1-year and 2-year inflation swaps trade at their highest levels since March 2023.
“The Fed minutes are likely to read moderately hawkish and carry the tone of the January press conference,” Mott Captial said. “The overall tone should indicate that the Fed wants to see more progress on inflation, but at the same time, send a message that the Fed believes the policy is restrictive.”
“However, the data do not support that, nor do financial conditions. If that is the message of the minutes, it should lead to the bond market bear steepening resuming, as rates on the long-end of the yield continue to push higher.”
Morgan Stanley economists say that Chairman Jay Powell's "testimony in mid-February gave a more timely update on Fed thinking than the minutes will. Even so, we’ll look for assessments of recent disinflation, of potential effects from tariffs and policy uncertainty, and of the restrictiveness of current policy."
"Fed officials’ views on these differ, and the minutes may offer information about the distribution of their thinking," they said.
In the news this long weekend, OPEC+ is weighing yet another delay to its plan to unwind voluntary production cuts and resume monthly supply hikes from April, according to Bloomberg.
If it decides to push back the move, it'd be the fourth time that the Saudi Arabia-led oil producing alliance has delayed plans to restart production hikes since 2022.
While a decision will likely be finalized in the coming weeks, the group is split on how to proceed. A delegate cited in the report said global oil markets continue to be too fragile to restart production.
Tencent (OTCPK:TCEHY) shares rose to their highest level since 2021 on Monday after the company said its WeChat messaging app has launched beta testing with Deepseek (DEEPSEEK), joining a growing list of Big Tech majors integrating DeepSeek’s AI software across China.
And “Captain America: Brave New World” became the first big box office opening of the year, bringing in $88.5 million, according to studio estimates released Sunday.
Sony’s “Paddington in Peru” came in second with $13 million. The film opened in the UK in early November. Horror movie “Heart Eyes” came in third with $10 million during its second weekend. “Dog Man” came in fourth, and Chinese film “Ne Zha 2” came in fifth.
For income investors, Ford (F) and Johnson & Johnson (JNJ) go ex-dividend on Tuesday. Ford pays out on March 3 and J&J pays out on March 4.
Microsoft (MSFT) goes ex-dividend on Thursday, paying out on March 30. And Yum! Brands (YUM) goes ex-dividend on Friday, with a payout date of March 7.
And in the Wall Street Research Corner, Citi Research analysts highlighted their Thematic 30 list of recommendations.
These are 30 stocks within three investing styles, including growth, cyclical, and defensive, and organized by several subsectors. The picks have outperformed the benchmark Russell 1000 (IWB) since Q4 last year.
Among the sectors are Artificial Intelligence, FinTech, Agricultural Demand, Global Tourism and Polution Solutions.
Their AI picks are: Amazon (AMZN), DoorDash (DASH), DocuSign (DOCU), Equinix (EQIX), GoDaddy (GDDY), Marvell Technology (MRVL) and Uber (UBER).
Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
