A Flurry Of Economic and Earnings Data
New Thursday morning economic data has just been released, with fresh Initial and Continuing Jobless Claims, Housing Starts and Building Permits, and an updated Philly Fed survey read joining quarterly results from Walmart WMT. While the big-box retailer outperformed expectations, much of the other data this morning did not.
Let’s start with the good new first: Initial Jobless Claims kept its stellar week-by-week performance intact by dropping 2000 claims on the headline from last week to 212K new jobs, from the downwardly revised 214K the previous week. Continuing Claims fell again as well, from the already-impressive 1.76 million the previous week to 1.72 million last week. We are now firmly in the lowest quartile of the 200Ks (200-225K new claims) and have been for months, and have apparently shifted to a lower quartile in the high 100Ks but ducking beneath 1.75 million continuing claims.
That said, Housing Starts for July missed expectations badly this morning, posting 1.169 million new starts last month but well off the 1.271 million analysts had been anticipating. Year over year, this headline number reached positive territory, but only by 0.8%. Compare this to the +8.3% year over year growth expected — new housing starts are way off expectations, to the downside.
Building Permits, the best forward indicator of future starts, outperformed estimates last month, albeit slightly. A total of 1.311 million new permits were issued in July, up from the upwardly revised 1.292 million in June. This is a fairly solid number; hopefully actually breaking ground on new housing will follow suit as projections indicate. That said, with rising lumber and aluminum prices (due somewhat to our new “tariff economy”), along with steadily increasing interest rates driving mortgages up, this is far from a slam-dunk future outcome.
Also, the Philly Fed survey for August came out this morning, but at less than half last month’s total: 11.9 versus 25.7. This suggests productivity weakness in one of the top ten cities in the U.S., which essentially makes this incidental information. New York’s Empire State survey, released yesterday, performed slightly better than expectations. These figures do tend to harbor some innate volatility month-to-month, as well, so we’re not making too much out of today’s Philly Fed right now.
Walmart impressed investors this morning, with a beat-and-raise in its fiscal Q2 report. The retail behemoth earnings $1.29 per share, topping the Zacks consensus of $1.21, on revenues of $128.0 billion outpacing the estimated $125.6 billion. This also represents Walmart’s 11th beat in its past 12 quarters.
Comps in grocery sales were particularly strong, up 9% year over year, in what reportedly is expected to be Walmart’s best earnings gap-up in 17 years. The company also raised full-year guidance and looks to open in the positive year over year, its +10% ahead of the bell effectively wipes out the year-to-date deficit of -8.4%. What’s more, expect analyst revisions to climb in the wake of the report, which may be expected to take the Zacks Rank #4 (Sell) company into a higher rank. For more on WMT’s earnings, click here.
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