Your Tuesday Blip 8/18/20

Your Tuesday Blip 8/18/20

Markets got an early boost from positive housing data and earnings from Home Depot and Walmart but as the day wore on the bullish fever faded and at the close the Dow was off 66 points at 27,778. Trading volume was up a bit. Both IBD and BTS still are positive on overall market direction.
It seems the “stay at home” orders continue to boost all things housing. US housing starts surged in July by 22.6%. This increase was far more than the gurus had expected plus is was the third month in a row of increases. Strength was seen across all regions of the country with the south leading the way. Low interest rates plus flight from cities is fueling demand.
Walmart posted better than expected earnings thanks to a 97% jump in e-commerce sales. US same store sales rose by 9.3% outpacing the 5% number that Wall Street expected. Overall the company saw a 6% revenue rise which is the best reading in years and a 23% increase in net income. CEO Doug McMillion talked about difficulty is keeping some items stocked which was (and is) creating some headwinds. He also noted they were looking at introducing a membership program and something called “Walmart +” which is expected to compete with Amazon Prime. Shares of Walmart hit a high before retreating a bit.
Home Depot continues to cash in on the remodeling binge with people fixing up their homes during the lockdown. The company posted a whopping 23% revenue increase and growth in profits of 27%. Everything was in this report was good. Margins improved, comp sales were up 25%, customer transactions grew 12.3% and the average ticket price was up 10.1%. All of these results beat estimates by a wide margin and analysts cheered the report sending shares higher.
Bill is back from the Ptarmigan Traverse hike and it was spectacular except for a fall off a log on the last day which resulted in a cracked rib. On the fourth day of the trip we were stuck in a snowstorm with 30 mph winds. The scouts on the traverse did great and one dad noted that all the work we did training these lunkheads when they were young paid off. Also thanks to John and Cleo for covering while I was away.

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