Walmart And Home Depot Earnings Boosted U.S. Stocks

Commenting on Walmart Inc (NYSE:WMT) and Home Depot Inc (NYSE:HD) and today’s trading Gorilla Trades strategist Ken Berman said:

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Q2 2020 hedge fund letters, conferences and more

The major indices are mixed and flat at midday, following a quiet overnight session that saw a rally in the recently weak European markets. The dollar hit a new two-year low against a broad basket of currencies amid the risk-on shift, but while the Nasdaq and the S&P 500 both scored all-time highs in the first minutes of trading, stocks turned lower in just after the opening bell. The number of new COVID cases hit an almost two-month low near 40,000 as the pressure on the Sun Belt states continues to ease, but the lack of a stimulus deal continues to weigh on the market.

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Walmart And Home Depot Beat Estimates

In economic news, building permits and housing starts smashed expectations, with both measures coming in at 1.5 million. Last month’s figures were also revised higher, as the recovery in the housing sector continues to outpace all expectations. The much better-than-expected quarterly numbers of Walmart (WMT, -1.4%) and Home Depot (HD, -1.1%) boosted U.S. stocks as well in pre-market trading. Skyrocketing online sales drove both firms’ results, which actually triggered a rally in Amazon’s (AMZN, +2.5%) share, while the two retailers turned lower together with the broader market.

Market Wrap

Dow: 27,781, - 63 or 0.2%

S&P 500: 3,384, + 2 or 0.1%

Nasdaq: 11,173, + 43 or 0.4%

Russell 2000: 1,572, - 14 or 0.9%

Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a 7-to-3 ratio on the NYSE at midday. Only 10 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 82 stocks hit new 52-week highs. The major indices have been trading below their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday selling pressure. Most of the key sectors are in the red at midday, with only the Amazon-led consumer cyclicals and communication services sporting gains, but the losses are limited, even in the weakest energy and utilities sector. Stay tuned!