The JPY is the strongest and the NZD is the weakest as the NA session begins

The JPY is the strongest and the NZD is the weakest as the North American session begins. The USD is mostly higher with the NZDUSD the biggest mover with the USD moving up 0.78% vs that currency. The greenback is near unchanged vs the EUR and the JPY to start the day.

Big US retailer Walmart reported earnings. Below is a summary of Walmart’s Q3 2024 earnings and revenues:

• Earnings Per Share (EPS): $1.53 (beating expectations of $1.52)
• Revenue: $160.80 billion (surpassing expectations of $159.72 billion)
• Raised Full-Year EPS Outlook: Increased to a range of $6.40 to $6.48 from the previous range of $6.36 to $6.46 (expectations of $6.48)
• Raised Full-Year Same-Store Sales (SSS) Outlook: Raised to a range of 5.0% to 5.5% from the previous range of 4.0% to 4.5%

Q3 Same-Store Sales (SSS) Performance:

• Walmart US: +4.9% (exceeding expectations of +3.35%)
• eCommerce: +24%
• Sam’s Club (excluding fuel): +3.8% (exceeding expectations of +3.63%)

Additional Commentary:

• Inventory is reported to be in good shape for future operations, with Walmart U.S. inventory down by 5% and higher in-stock levels.
• Walmart U.S. sales strength was driven by grocery and health & wellness, while general merchandise sales saw a modest decline.
• Consolidated Gross Margin (GM) improved by 32 basis points, with a slight positive impact from Walmart U.S. and the timing of Flipkart’s The Big Billion Days event, which shifted from Q3 last year to Q4 this year.

Despite the gains, the price is down -$13.49 or -5.27% at $242.69.

In geopolitical news, U.S. Pres. Biden and Chinese Pres. Xi held a four-hour meeting to address high tensions between their countries. They agreed to re-establish military communications, which had been closed since 2022 when Nancy Pelosi visited Taiwan. Although there are concerns about Taiwan’s status, Xi denied invasion plans, but called it a potentially dangerous issue. Biden emphasized the importance of peace and stability in the region. Xi later spoke to American business leaders, expressing China’s willingness to be a partner and friend to the U.S.

And then there is Washington…The U.S. Senate has approved a stop-gap spending plan to prevent a partial government shutdown. The bill, previously passed by the House of Representatives, now awaits President Biden’s signature. Senate Majority Leader Chuck Schumer praised the bipartisan support for the short-term spending proposal, which will avoid cuts to essential federal programs. However, uncertainty remains regarding future funding deadlines. On Friday, Moody’s downgraded the US credit rating outlook.

In the markets today, yields are lower but it is not boosting stock prices. The major indices are lower after gains yesterday. Having said that, the broader indices gave up larger gains that were whittled away through the day.

A snapshot of the markets as the NA session gets underway shows:

• Crude oil is trading down -$0.50 or -0.64% at $76.18. At this time yesterday, the price was trading at $78.05
• Spot gold is trading up $5.50 or 0.30% at $1964.92.. At this time yesterday, the price was trading at $1971.76
• Spot silver is trading up $0.17 or 0.72% at $23.60. At this time yesterday, the price was trading at $22.46
• Bitcoin is trading at $37143. Yesterday, the price was trading at $36,217

In the US stock market, the major indices are trading lower in pre-market trading

• Dow Industrial Average futures are implying a loss of -69.50 points. Yesterday, the index rose 163.51 points or 0.47% at 34991.22
• S&P index futures are implying a loss of -7.5 points. Yesterday the index rose 7.18 points or 1.91% at 4502.89
• NASDAQ futures are implying a loss of -44 points. Yesterday the index rose 9.45 points or 0.07% at 14103.84

Yesterday the Russell 2000 rose 2.895 points or 0.16% at 1801.22

In the European equity markets, the major indices are trading mixed

• German DAX, 0.44%
• France’s CAC, -0.35%
• UK’s FTSE 100, -0.59%
• Spain’s Ibex, +0.38%
• Italy’s FTSE MIB, +0.03% (10 minute delay)

In the Asia Pacific market, major indices closed lower on the day:

• Japan’s Nikkei index, -0.28%
• China’s Shanghai Composite Index, -0.71%
• Hong Kong’s Hang Seng index, -1.36%
• Australia’s S&P/ASX index, -0.67%

In the US debt market, yields are marginally higher after yesterday’s sharp declines

• US 2Y T-NOTE: 4.886% -3.0 basis points. At this time yesterday, the yield was at 4.850%
• US 5Y T-NOTE: 4.485%, -4.1 basis points. At this time yesterday, the yield was at 4.452%
• US 10Y T-NOTE: 4.498% -3.9 basis points at this time yesterday, the yield was at 4.468%
• US 30Y BOND: 4.661% -3.0 basis points at this time yesterday, the others at 4.640%
• 2 – 10-year spread is at -38.4 basis points. This time yesterday, the spread was at -38.4 basis points
• 2 – 30 year spread is at -22.1 basis points basis points. This time yesterday the spread was at -21.4 basis points

In the European debt market, benchmark 10-year yields are trading lower: