How I Spent My Long Weekend
No surprise to anyone here, I spent the weekend studying markets and talking to executives. As Alec Baldwin said in 1992 movie classic "Glengarry Glen Ross," "coffee is for closers" -- and I drink a lot of it. Blackstone Group's's (BX) markets sage Byron Wien told me investors need complacency beaten out of them. Full disclosure: I laughed out loud when the 86-year-old, sharp-as-a-tack investing legend said that. He also offered these nuggets: (1) "I still think the market will end the year higher than we started, I just think we will go down and test the lows again." (2) "The market thinks Trump will be in office forever, and that he will repeal the two-term thing and serve for the next 20 years." Imagine? After Wien, I studied up to chat about toys with Hasbro's (HAS) CEO Brian Goldner at the company's toy fair on Monday. Goldner has done one heck of a job atop Hasbro for the past 10 years. It never ceases to amaze me how the company continues to find innovation from toys that in some cases have been around for decades. While I am no kid anymore, I think I know a winning toy when I see one -- and Hasbro had a ton of them on display this year. Goldner told me he remains bullish on Disney's (DIS) Star Wars franchise and that the Toys 'R' Us bankruptcy isn't a longer-term problem. Given his track record, investors may want to take him on his word.
Retail Earnings Madness
So much for earnings season being over. The investor relations people at Walmart (WMT) and Home Depot (HD) forgot to huddle up beforehand and agree to release their earnings on separate days this week. It's just wrong to release them on the day after the long weekend (:::insert frowny face:::). Nevertheless, reports from retailers are here and the market has some analysis to do. Per the usual, Home Depot blew away profit forecasts and posted a hearty same-store sales gain as people continued to remodel their homes in droves. Hey, a bull market in stocks is great for borrowing $50,000 to redo the kitchen. Stainless steel, please. Home Depot's 2018 outlook, and long-term guidance, were both solid. Look for Lowe's (LOW) to report a much weaker quarter -- Home Depot has better-positioned stores and does a better job marketing and online. I am talking to Home Depot Chief Financial Officer Carol Tome on Tuesday morning - hopefully I'll have more to report after. Then there is Walmart.
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Walmart Deserves Its Own Section Here
Not too sure how Wall Street will take the quarter from the world's largest retailer. Shares are tanking today as the company missed earnings estimates by 4 cents. The profit outlook for 2018 also was on the light side. From what I can tell, Walmart's results and outlook are being held back by efforts to transform the company (online, etc.) and invest in workers. Not bad things, of course, but aspects a bullish Wall Street probably hasn't factored in correctly. There is only so much a lower tax rate can do. The unknown here is how Wall Street will weigh a clear positive top-line sales story. Walmart's U.S. same-store sales rose 2.6% (good) on higher traffic and ticket increases (good). E-commerce sales increased 23% in the U.S. (slower, but good in a world of Amazon (AMZN) ). Walmart guided to 40% U.S. e-commerce growth this year, which signals to the market the company has several initiatives in store to re-accelerate growth. My gut tells me the pullback is an an entry point.
Bitcoin is on fire, for reasons TheStreet's Kinsey Grant will be diving into this morning. So check back soon.
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