“You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you're too inefficient.” – Sam Walton
US equity futures have reversed earlier gains and are now firmly in the red. S&P 500 futures are trading down 0.3%, and the Nasdaq is 0.5% lower. Crude oil is a big drag on equities as WTI spikes 3% to $88.70 after increased rhetoric towards Iran from President Trump. Moves in the Treasury market have also been interesting as the 10-year yield rises 6 basis points to 4.71%, erasing all of yesterday’s decline. Gold and Bitcoin had big rallies yesterday in response to the Treasury’s announcement, but this morning gold is lower while Bitcoin continues to surge, topping $71K for the first time since June.
In Asia, stocks were firmly higher with the Nikkei up 1.4%, while South Korea surged nearly 6% as memory stocks rallied. In Europe, the tone looks more like US futures as the STOXX 600 is fractionally lower on little news.
In terms of US data, the Philly Fed and Jobless Claims hit the tape at 8:30 while Leading Indicators will round out the day’s data at 10 AM. Jobless claims were mixed, with initial claims lower and continuing claims higher. The Philly Fed report, though, smashed expectations, coming in at 47.4, nearly doubling expectations.
Walmart marked the unofficial end to earnings season this morning by reporting better-than-expected earnings and sales. Despite the beat, the company lowered forward guidance, and that has the stock trading down more than 5% in early trading. With that decline, the stock is also trading below its July lows, at its lowest level since last November. WMT had been a market leader earlier this year, but after a disappointing report in May, coupled with this morning’s weakness, the stock is down more than 20% from its peak.
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