Lowe's stock bounces after third-quarter sales of stores open more than a year rise more than expected, but also outpace those of rival Home Depot. ...

Core Viewpoint - Home Depot has lowered its earnings forecast for fiscal year 2025 due to disappointing performance in the previous quarter, consumer uncertainty, and pressure in the housing market [1] Financial Performance - Home Depot expects diluted earnings per share to decline by approximately 6% in fiscal year 2025 compared to the previous fiscal year, a larger drop than the previously anticipated 3% in August [1] - The company's gross profit margin and operating profit margin expectations have also been revised downward [1] - In the third quarter of fiscal year 2025, Home Depot reported a net profit of $3.6 billion, a year-on-year decrease of 1.3%, with adjusted diluted earnings per share falling below market expectations [1] Market Conditions - The CEO, Ted Decker, noted that while potential demand remains relatively stable, the anticipated growth in demand for the third quarter did not materialize [1] - Consumer uncertainty and ongoing pressure in the housing market have significantly impacted the demand for home renovations [1] - CFO Richard McPhail indicated that the slowdown in the housing market and high borrowing costs have made consumers reluctant to spend significantly on home repairs, compounded by increased layoffs and declining home prices [1]

Core Viewpoint - The stock of Techtronic Industries (00669) has dropped over 3% following disappointing quarterly results from its major customer, Home Depot (HD.US), which reported lower-than-expected profits and same-store sales due to a weak real estate market and reduced demand from adverse weather events [1] Group 1: Company Performance - Home Depot's revenue for the third quarter increased by 2.8% year-on-year, reaching $41.4 billion, slightly above market expectations [1] - Same-store sales growth was only 0.2%, falling short of the anticipated 1.4% growth [1] - Home Depot has lowered its full-year profit forecast, citing that some consumers are postponing large purchases of home goods due to a lack of confidence [1]

Core Viewpoint - The stock of Techtronic Industries (00669) has dropped over 3% following disappointing quarterly results from its major customer, Home Depot (HD.US), which reported lower-than-expected profits and same-store sales due to a weak real estate market and reduced demand from adverse weather events [1] Group 1: Company Performance - Home Depot's revenue for the third quarter increased by 2.8% year-on-year, reaching $41.4 billion, slightly above market expectations [1] - Same-store sales growth for Home Depot was only 0.2%, falling short of the anticipated 1.4% [1] - Home Depot has lowered its full-year profit forecast, citing that some consumers lacking confidence have postponed large purchases of home goods [1]

Core Insights - Home Depot has cut its full-year outlook due to a slowdown in consumer spending, with comparable sales rising only 0.2%, and US comps up by 0.1%, falling short of Wall Street expectations [1][3][7] - The company is experiencing a decline in demand as middle-class shoppers are becoming more cautious, influenced by high borrowing costs and a sluggish housing market [3][4] - External factors such as milder weather and a lack of storms have negatively impacted sales of seasonal products, further contributing to the decline in home improvement demand [4][5] Group 1: Company Performance - Home Depot reported weakening sales growth for Q3, with a significant drop in expected demand [2][3] - The company had anticipated better results due to easing interest rates, but this did not materialize [3][4] - The decline in home improvement projects is estimated at 0.8% from the previous year, particularly affecting big-ticket remodels that require financing [5] Group 2: Industry Trends - The slowdown in consumer spending is part of a broader trend affecting the retail sector, with many retailers facing similar challenges [6][8] - Analysts indicate that the consumer backdrop is deteriorating quickly, moving from "soft to softer" as winter approaches [4][7] - Uneasy consumers are shifting their spending towards travel and leisure rather than home upgrades, impacting overall demand in the home improvement sector [5][6]

Core Insights - The article highlights a significant decline in major tech stocks, particularly Nvidia, Tesla, and Amazon, amid growing skepticism about the sustainability of the AI investment boom [1][2][3] Group 1: Stock Performance - Nvidia experienced a drop of 2.81%, with a trading volume of $38.569 billion, marking a cumulative decline of over 10% for the month [1] - Tesla's stock fell by 1.88%, with a trading volume of $32.16 billion, following the approval of CEO Elon Musk's record-breaking compensation plan [1] - Amazon's stock decreased by 4.43%, with a trading volume of $13.539 billion, as analysts downgraded its rating due to concerns over AI returns [2] Group 2: Analyst Insights - A recent survey by Bank of America indicates that most fund managers believe the AI investment frenzy has peaked [1] - Redburn analysts downgraded Amazon and Microsoft from "Buy" to "Neutral," citing unclear prospects for generative AI and weaker-than-expected economic benefits [2] Group 3: Corporate Developments - Microsoft and Nvidia committed to investing up to $15 billion in AI developer Anthropic PBC, strengthening their competitive position against OpenAI [1] - Home Depot's stock fell by 6.02% after the company reported disappointing Q3 results and lowered its full-year sales outlook due to a sluggish U.S. housing market [4]

For those who view technical analysis as an important part of their investment or trading tool kit, these are interesting times. Even those who dismiss it out of hand may have to respect its potential impact on markets right now.Amazon is raising $15 billion in its ‌first bond issue in three years, Boaz Weinstein's Saba Capital Management has sold credit derivatives to lenders seeking protection on names like Oracle and Microsoft, and alternative asset manager Blue Owl - involved with Meta in the financing ...

Market Outlook - Markets are anticipating Nvidia's earnings report for insights on the AI outlook, along with earnings from Target and Walmart to gauge consumer spending health [1] - The US Nov NAHB housing market index unexpectedly rose by 1 to a 7-month high of 38, surpassing expectations of no change at 37 [1] Labor Market and Economic Indicators - US weekly initial unemployment claims were reported at 232,000 for the week ending October 18, with continuing claims rising by 10,000 to a 2-month high of 1.957 million [2] - Richmond Fed President Barkin's dovish comments regarding layoffs by large companies and inflation expectations supported stock market recovery [2] - The 10-year T-note yield fell by 2 basis points to 4.12% following ADP's report of an average job loss of 2,500 per week in the four weeks ending November 1 [2] Stock Market Performance - US stock indexes extended declines, with the S&P 500, Dow Jones, and Nasdaq 100 reaching 1-month lows, driven by weakness in technology stocks [3][4] - Amazon.com and Microsoft saw significant declines of over 4% and 2% respectively after a downgrade by Rothschild & Co Redburn [3][10] - Home Depot's stock fell over 6% after cutting its full-year earnings guidance, indicating reduced consumer spending on home improvements [3][12] Earnings Season Insights - Q3 corporate earnings season is nearing completion, with 82% of S&P 500 companies exceeding forecasts, leading to a 14.6% increase in earnings, significantly above the expected 7.2% [6] - Home Depot reported Q3 comparable sales growth of only 0.2%, below the consensus of 1.36%, and adjusted its full-year operating margin estimate downwards [12] International Market Trends - Overseas stock markets also experienced declines, with the Euro Stoxx 50 down 1.88%, China's Shanghai Composite down 0.81%, and Japan's Nikkei 225 down 3.22% [7] Interest Rates and Bond Market - December 10-year T-notes closed up by 4.5 ticks, with the yield falling to 4.121%, driven by stock market weakness and labor market concerns [8] - European government bond yields showed mixed results, with the 10-year German bund yield decreasing by 0.6 basis points [9]

Core Viewpoint - Home Depot reported third-quarter adjusted earnings that fell below analyst expectations, leading to a 3% decline in stock price despite revenue slightly exceeding forecasts [1]. Financial Performance - Adjusted EPS for the third quarter was $3.74, which was lower than the consensus estimate of $3.84 [2]. - Revenue increased by 2.8% year over year to $41.4 billion, surpassing expectations of $41.18 billion [2]. - The revenue figures included approximately $900 million from the acquisition of GMS Inc., accounting for around eight weeks of consolidation [2]. - Comparable sales rose only 0.2%, with U.S. comparable sales up 0.1%, indicating ongoing softness in the housing market and consumer spending [2]. Future Outlook - Home Depot updated its fiscal 2025 outlook, projecting approximately 3% total sales growth and "slightly positive" comparable sales for the comparable 52-week period [3]. - Adjusted diluted earnings per share are expected to decline by roughly 5% from fiscal 2024's figure of $15.24 [3].

Company Performance - Home Depot's stock fell 6%, marking the worst performance in the S&P 500, after the company missed third-quarter earnings forecasts and lowered its full-year profit outlook due to a lack of storms and economic uncertainty affecting homeowner remodeling projects [4][9]. - Medtronic's stock rose approximately 5% after exceeding analysts' estimates for fiscal second-quarter sales and adjusted profit, driven by strong demand in its end markets [8][10]. Market Overview - Major U.S. equity indexes declined for the second consecutive day, with the S&P 500 dropping 0.8%, the Dow sliding 1.1%, and the Nasdaq losing 1.2%, ahead of several high-profile earnings reports and delayed jobs data [3]. - Concerns regarding high valuations in the artificial intelligence sector negatively impacted tech stocks, with Western Digital and Micron Technology shares falling 5.9% and 5.6%, respectively [5]. Regulatory Developments - Amazon and Microsoft shares decreased by 4.4% and 2.7%, respectively, following the announcement of investigations by European Union regulators into their cloud computing services [6].